NewburyportNews.com, Newburyport, MA

January 10, 2014

Congress should extend unemployment benefits


Newburyport Daily News

---- — The crowd of local business leaders gathered Wednesday morning over bacon and eggs for the North Shore Chamber of Commerce’s annual economic forecast were greeted with a mostly positive outlook for 2014.

Rob Lutts of Salem’s Cabot Money Management and David Caruso of Coastal Capital of Danvers both expect the economy to continue to expand in the new year, with a healthy stock market for investors, a wealth of venture capital for innovators and increasingly healthy balance sheets for recession-weary companies.

Lutts pointed out, however, that the economy is improving along two separate tracks. For highly educated, skilled workers — “basically, everyone in this room,” he said, gesturing to the crowd gathered at the Danversport Yacht Club — the recovery is moving apace. Trained workers are once again in demand.

For the unemployed members of the so-called “unskilled” labor force, Lutts said, the going has been much more difficult. Many jobs that disappeared during the recession simply aren’t coming back as companies increased efficiency.

Those workers need to be trained for new jobs, Lutts said, noting the important role schools such as North Shore Community College can play in the effort.

That retraining takes time, which is one more reason why Congress needs to extend emergency jobless benefits for the long-term unemployed.

Earlier this week, the Senate passed a measure that would restore benefits to an estimated 1.3 million long-term jobless — including 60,000 in Massachusetts — who were cut off when the program expired Dec. 28. The extension would also delay a cutoff in benefits for another 1.9 million people. Federal coverage averages about $256 a week and lasts from 14 to 47 weeks. State-funded benefits typically run out after 26 weeks (30 in Massachusetts).

The measure faces a much tougher road in the House, where Republicans are balking at the $6.5 billion price tag. Others, such as Rand Paul of Kentucky, argue that an extension would simply let the unemployed put off looking for work, “to become part of this perpetual unemployed group in our economy.”

Fortunately, not all Republicans agree with Paul’s line of thinking. New England senators Kelly Ayotte and Susan Collins voted with their Democratic counterparts earlier this week. And the American Enterprise Institute’s Michael Strain, writing in National Review Online last month, called an extension “a reasonable and prudent measure.

“If 26 weeks is deemed long enough for a worker to find a job in normal economic conditions, then it’s not long enough during a recession, when jobs are much harder to come by,” Strain wrote. “This is double true for a downturn as serious as the Great Recession. When the labor market is in better shape, of course, the emergency federal extensions are allowed to expire.”

Yes, extending benefits will likely cause an uptick in the unemployment rate, which hovers around 7 percent. Letting them expire, however, is not the answer, as many of the long-term unemployed would likely stop looking for work once they lost their benefits.

Strain puts it best: “We should want to keep long-term unemployed attached to the labor force until the economy picks up, more jobs become available, and they can find work. We should not want today’s long-term unemployed to permanently exit the labor force simply because their benefits expire. Why? Because many may end up on government assistance until they reach retirement age. That is worse for them, worse for the economy, and more expensive for the federal government over the long term.”

We agree. For the recovery for this recession to be considered complete, it needs to include all Americans.