Wednesday, June 17, 2009

On the politics of saying no to the jobless -- May 21, 2009 column


“How’s it going?” I asked the harried checkout clerk at a grocery store in Northern Virginia.

“Two days ‘til payday!” he said.

Lowering his voice and still scanning items, he added, “I have to work two part-time jobs just to pay my bills. They say the unemployment rate is, what, about 9 percent? Well, I bet it’s really at least 12 or 13.”

The supermarket economist was onto something. The official unemployment rate in April was 8.9 percent but that tells only part of the story. The Bureau of Labor Statistics also surveys households for an unofficial employment rate that includes discouraged workers who have stopped looking because they think no jobs are available and part-time workers who want a full-time job, like the guy at the grocery store. That rate was 15.4 percent in April.

In all, about 13.7 million people were officially unemployed in April, and another 2.1 million were what the government calls “marginally attached to the labor force.” That’s a lot of potential votes, a point that some Southern politicians seem to be missing.

Rising unemployment makes the case for a government safety net – food stamps, unemployment insurance and Medicaid. These payments have the added benefit of juicing the economy, as people tend to spend them quickly. By contrast, stimulus spending for education and other measures reap benefits in the longer term.

Critics complained that President Barack Obama’s $787 billion economic stimulus package was short on immediate stimulus, but the American Recovery and Reinvestment Act did contain $7 billion to expand unemployment programs to reach another half million people. States can choose among several options to expand eligibility.

They can provide benefits to people seeking part-time work, to those who are jobless because of domestic violence or relocation due to a spouse’s job or to those who have already exhausted unemployment benefits and are enrolled in approved training programs.

It seems counterintuitive that politicians would refuse money to help the unemployed get back on their feet, but several Republican governors -- of Alabama, Louisiana, Mississippi and Texas -- rejected the stimulus for unemployment benefits. Gov. Sarah Palin of Alaska first said she wouldn’t take it but later reconsidered.

The argument against the federal largesse is part states’ rights and part taxes. Opponents of the unemployment stimulus provision say states would lose control over eligibility and would be forced later to raise taxes on all businesses to continue the expanded program.

States are also wary of entitlement creep. States already devote about 21 percent of their budgets to food stamps, Medicaid and unemployment benefits, according to the National Governors Association.

Gov. Bob Riley of Alabama said the $66 million in stimulus for unemployment benefits would run out in about four years, forcing Alabama to raise taxes on all employers to the tune of $17 million a year.

“Congress has tucked this job-killing tax increase inside the stimulus and that’s something Alabama should not be forced by the federal government to accept,” Riley said. Efforts in the state legislature to go around Riley have stalled.

North Carolina, where unemployment has risen to the highest levels in 25 years, is on track to receive $205 million for unemployment expansion.

Virginia’s Democratic Gov. Tim Kaine wanted the $125 million in unemployment stimulus for his state, but the legislature said no, citing the prospect of higher taxes.

The people making these decisions all have jobs, but voters will decide whether to let them keep them.
The first voters to make the judgment are in Virginia, which will elect a new governor in November.

In Virginia, all three Democratic gubernatorial candidates competing in a primary June 9 say they would have accepted the unemployment stimulus. The Republican candidate, former state attorney general Bob McDonnell, approves of the General Assembly’s decision. His spokesman said McDonnell believes the unemployment expansion money is an “expensive unfunded mandate.”

Common Sense Virginia, a group financed by the Democratic Governors Association, is running TV ads against McDonnell. In one, an unemployed man named Stephen Bishop of Christiansburg says McDonnell turned his back on unemployed Virginians.

“Now he wants to be governor? No way,” Bishop declares.

But this is May. Much depends on where the economy is and whether guys working two jobs have time to vote in November.

(Marsha Mercer is an independent columnist writing from Washington. You can contact her at

© 2009 Marsha Mercer. All rights reserved.

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