Editorial: A terrible time to cut off unemployment benefits
Extended unemployment benefits for the 1.3 million people receiving them are set to expire three days after Christmas. About 1,100 of those recipients live in New Hampshire. Democrats, including President Obama, want to extend them yet again to keep more households out of poverty and aid the economy. Republicans, citing the $25 billion 10-year cost of an extension, say enough is enough. They contend that the benefits, which differ radically from state to state, discourage recipients from seeking work or accepting low-paying jobs.
The Democrats’ position is more right than wrong. The cost of extending benefits would be offset by the extra economic activity generated, activity that could provide employers with an incentive to add jobs. And studies indicate that only a tiny percentage of the long-term unemployed are content to remain on the rolls rather than work.
The week after Christmas is the worst possible time to pull the rug out from under households that rely on extended benefits. Any reserves held by recipients will likely have been exhausted by higher fuel bills and a modest attempt to participate in the holiday season. Recipients would be left with no income and no way to heat their homes, pay their mortgages, purchase medications or prevent eviction. The cost of supporting them would be passed down from the federal government to local taxpayers in the form of higher outlays for rent subsidies, fuel assistance and other aid.
Congress should extend benefits, which might have to be done in legislation separate from the current budget bill. The government has never eliminated extended benefits when the national unemployment rate is as high as the current 7.3 percent. The economy has improved, but there are still three applicants for every job opening.
The long-term unemployed, those out of work for at least 27 weeks, face more obstacles than their predecessors. Technology changes so rapidly that employers fear the skills the long-term unemployed have are out of date. The very fact that you have been out of work for a long time is often a strike against you.
The economy is more global than ever. Workers in more and more fields, white-collar workers included, must compete against foreign workers willing to do the same job for much lower pay. Technology and automation that includes, for example, the increased use of robots has allowed employers to make do with fewer workers. There are 1.6 million fewer jobs than there were prior to the recession.
The jobs many of the long-term unemployed lost were in manufacturing. The jobs created as the economy improved have largely been in the service sector and low paid. Will society, and the economy, really be better off if unemployed engineers, teachers, journalists and managers are forced by the end of benefits to take an unskilled, low-wage job? We suspect not.
We are sympathetic to the argument that extending benefits risks adding to the debt that coming generations of workers will have to pay. And we, too, believe that at some point, no matter what one’s level of past accomplishment, a low-paying job is better, and fairer to taxpayers, than no job. To that end, we propose a compromise that congressional Republicans might support, since their states are home to many of the long-term unemployed.
Extend long-term benefits for another six months or year, but phase them out slowly, at a rate of 5 or 10 percent per month. That would keep recipients from falling into abject poverty in winter but give them an ever-increasing incentive to find a job.
A column on yesterday’s Forum page incorrectly stated that the Concord police substation at Royal Gardens is new. The complex has had such a police outpost for many years. In a planned renovation, that outpost will be housed in a new community center.