American Forum Op-Ed

AMERICAN FORUM
By Sarah van Gelder

President Obama is proposing important steps toward doing what Americans have been asking for since the financial collapse of 2008—putting a focus on families and jobs.

To create real prosperity, though, Washington will have to deal with three main drivers of our economic malaise: massive inequality such that the super wealthy and big corporations are sitting on piles of cash while ordinary Americans’ can barely get by; enormous ongoing expenditures for wars; and assaults on our natural systems, including our climate, such that costs of everything from insurance to food is rising while our security is threatened.

Without families buying things, the economy can’t revive and create jobs. That’s why our solutions need to focus on ways to support small businesses, which create the bulk of the jobs and keep money flowing locally instead of flowing to distant corporate headquarters.

In Cleveland, a local foundation, inner-city residents, hospital and university collaborated to create locally rooted cooperatives that supply these and other institutions with solar energy, eco-friendly laundry services and locally grown vegetables. The workers from this rust-belt city are the owners, and they’re creating jobs that can’t be outsourced.

Despite the credit crunch afflicting businesses nationwide, there’s one place where credit continues to flow: North Dakota, which has the nation’s only state-owned bank. The Bank of North Dakota partners with community banks to get credit to the state’s farms and local businesses. The results are the lowest unemployment rate in the country and a state budget surplus, when most other states are facing fiscal crises.

When local businesses and family farms thrive, the benefits ripple out into the community. These local enterprises buy from other local business, driving demand that creates even more jobs. This sort of economic activity results in prosperity based on real goods and services, not speculative bubbles.

Many young people are focusing less on jobs than on DIY livelihoods made up partly of paid work and partly of doing more themselves -- growing food, making and fixing things, and starting micro-businesses. They’re finding creative ways to make do with less and to share and exchange with friends and neighbors.

The best of these diverse livelihoods tap into the rising demand for goods and services that are sustainable—grown or made close to home without toxins and without pollution, produced by workers who are fairly compensated, and made by companies with a long-term commitment to the well-being of the human and ecological community.

But how about President Obama and the U.S. Congress? What can we expect from our federal government?

In a country still the wealthiest in the world, we should insist that our government invest in education, restore failing infrastructure and lead the transition to a clean-energy economy. Single-payer health care could provide security to would-be entrepreneurs while ending excessive premiums and out-of-pocket medical costs that are creating a major drag on the economy. Trade policies should be re-crafted to reverse offshoring of jobs. We could share jobs more broadly, so there is enough work and free time to go around. And we should preserve intact a safety net that keeps millions of seniors, children, disabled and unemployed from complete destitution.

With a fair tax policy—like the tax rate for the wealthy in effect during the Eisenhower years—we could pay for these investments. And we could save money by diverting our tax dollars from corporate subsidies and the world’s largest military budget to investments in our future.

These are policies that large majorities of Americans support. Groups like the recently formed movement to Rebuild the Dream are mobilizing hundreds of thousands of people to counter the lopsided clout of large corporations and the very wealthy and get these sort of family-friendly policies enacted.

We don’t have to be satisfied with unemployment and a stagnant economy. By rebuilding our local economies, changing policies that only benefit the super-rich and investing in a transition to an environmentally friendly society, the United States can still achieve real prosperity.
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Sarah van Gelder is executive editor and co-founder of YES! Magazine. Her article on jobs and livelihoods appears in the Fall 2011 issue of YES!
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Copyright (C) 2011 by the American Forum. 9/11

GEORGIA FORUM

By Clare S. Richie

Georgia’s unemployment trust fund is in the red. Since the end of 2009, the state has amassed a $635 million debt to the federal government so that it could provide unemployment benefits to Georgia’s growing number of laid-off workers.

Georgia’s first interest payment of $24 million is due this fall. Already cash-strapped, Georgia’s best option to make this interest payment, repay its loan and avoid federal tax increases on employers is federal relief. A poor alternative would be redirecting state funds from critical services such as education, health care or public safety in order to pay back the loan.

The unemployment trust fund is used to make weekly payments to eligible workers who are laid off due to no fault of their own. Employers contribute to the trust fund through federal and state unemployment insurance (UI) taxes. These contributions are used to build up the trust fund during strong economic times, creating a reserve that can be used to make payments during periods of high unemployment.

The severity and length of the recent recession placed an unforeseen strain on Georgia’s trust fund; yet, it’s not the sole cause behind the state’s need to borrow federal funds. Long periods of employer tax breaks depleted Georgia’s trust fund.

The federal UI tax has been stable at about $56 per employee per year. However, Georgia policymakers have repeatedly cut the state UI tax or suppressed tax increases over the past two decades.

The largest employer tax break came during the 2000-03 “UI tax holiday” during which most of Georgia’s employers paid no state UI taxes and the reserve fund dropped by $1.3 billion. Since 2004, even during strong economic times, legislation suppressed increases to employer contributions needed to build-up the reserves.
Georgia’s insolvency is not a spending issue. Georgia pays lower unemployment benefits than the national average ($269 per week compared to the national average of $296 per week), and for a shorter period of time, roughly 15 weeks. Even more so, only about one in three unemployed workers receive UI benefits. Despite the fact that unemployment payments are oftentimes half of the average employee’s wages, they sustain consumer demand during economic downturns and as the worker looks for another job.

Federal relief, as outlined in the Unemployment Insurance Solvency Act of 2011, would provide a two-year suspension of interest payments, and a two-year suspension of automatic federal employer tax increases. It also would allow for states to develop a plan to return to solvency in exchange for partial reduction in the state’s loan.

Without federal relief, Georgia will need to repay hundreds of millions of dollars to the federal government this fall. Failure to repay $24 million in interest would automatically increase employer federal UI taxes from $56 to $434 per employee starting in 2012. Failure to repay the $635 million loan would result in a $21 increase per employee per year until the loan is repaid.

Given the two options – federal relief or repayment in full – and considering Georgia’s current budget troubles, it seems obvious that federal relief is the best option for Georgia’s future.
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Richie is senior policy analyst for the Georgia Budget & Policy Institute. Analysis and recommendations on Georgia’s unemployment trust fund can be found at GBPI.org.
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Copyright (C) 2011 by Georgia Forum. 3/11

FLORIDA FORUM

By Emily Eisenhauer

Several bills before the Florida Legislature seek to make it harder for those who are out of work through no fault of their own to get unemployment compensation. Community service requirements, mandatory drug testing, and limiting the number of weeks all seem to be based on the idea that people who are getting benefits don’t deserve them or are not looking hard enough for a job. But in this economy, that doesn’t make sense, and these proposals will make it harder for the system to do its job.

Florida lost almost a million jobs in the recession that began in late 2007, and over 1.1. million people remain unemployed in the state. Last year, 2010, was better, in that the state added 43,500 jobs. But that just means for every job added, there were still 25 people looking for work. Right now almost half of the people out of work have been looking for a job for over 6 months, and over one-third have been looking for more than a year. In recent weeks the media have covered many stories of people who have been applying for any job they can find, and still coming up empty.

Florida already has one of the strictest unemployment compensation systems in the country. In any given week between 15 and 20% of people who submit claims are rejected by the state for not providing sufficient proof of work search or other eligibility reasons. Florida has the fourth lowest maximum weekly benefit in the country - $275 – with an average weekly payment of $230. That means that on average unemployment benefits replace about 38% of a worker’s previous salary. It’s hard to imagine that people surviving on 38% of their salary wouldn’t be out doing everything they can to get a new job.

Unemployment compensation exists for two reasons: 1) to provide support for people who are out of work through no fault of their own, and 2) to stabilize the economy during a downturn. UC functions like an insurance program, and in fact in other states it is referred to as unemployment insurance (UI). Money is paid by employers for each of their employees into a fund so that should a worker lose a job there’s a cushion until he or she finds another. It isn’t welfare, it is money that workers have already earned. Applicants must show they have worked a certain amount in order to draw benefits, and the amount of benefits anyone can is capped.

This insurance program not only benefits laid-off workers, it benefits the whole economy. When thousands lose their jobs within a short time period businesses get hurt too because demand for goods and services declines. UC replaces some of the money that otherwise would have been lost to the economy and puts it into the pockets of people who will immediately spend it on basic necessities. As for the numbers: The

Congressional Budget Office estimated that extending UI benefits would bring a return of investment of as much as $1.90 in increased gross domestic product for every dollar spent, compared with extending the Bush era tax cuts, which brings a return of only 40 cents on the dollar.

This is why it makes so much sense to make sure that everyone who has earned benefits is getting them. Even before the recession the system wasn’t perfect and many people who had earned enough to qualify were excluded because Florida still uses a pre-computer-era system for deciding eligibility. This unfairly denies benefits to many workers because it doesn’t count their last six months on the job, and it hits low-wage and seasonal workers especially hard.

Florida also has refused to modernize eligibility rules to provide insurance for workers who are victims of domestic violence or have to leave work to care for a sick family member. Thirty-two other states allow these workers to qualify.

For these reasons and others, Florida has one of the lowest recipiency rates in the country. A 2004 study by the Institute for Women’s Policy Research and the National Employment Law Project found that only 33 percent of unemployed workers in Florida were receiving unemployment benefits, compared with the national average of 44 percent. Some states, like Connecticut, had rates exceeding 80 percent.

If Florida modernized its system tens of thousands more workers would be able to get the benefits they have earned, and the whole state would reap the economic benefit. Not to mention the $444 million that Florida could receive under the American Recovery and Reinvestment Act if it made these changes, and which would more than pay for the additional benefits.

Instead of making the unemployment compensation system even more difficult for workers, now is the time when we should be making sure that everyone who is eligible is participating. Unemployment benefits keep the economy moving, which is exactly what we need right now.
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Eisenhauer is a research associate at the Research Institute for Social and Economic Policy at the Center for Labor Research and Studies at Florida International University.
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Copyright (C) 2011 by the Florida Forum. 3/11

FLORIDA FORUM

By Jackie Rodríguez

I am not to blame for the unemployment crisis in Florida. Yes, I have been unemployed. And yes, I have collected unemployment to support myself and my family. After two years since I was last laid-off, I finally found a new opportunity just a month ago. It was not easy, and I do not blame myself. But I do point my finger at the economy and the greed of our current economic system that only looks out for those on top.

The news is all a flurry with the idea that unemployed people, like I was just a few days ago, are the ones to blame for the situation we find ourselves in. This round of “blame the victim” is nothing less than despicable, shameful and downright dishonest. Let’s look at the facts behind the blame game.

In Florida, for every job created last year there are 25 people who still need a job. Our state has a whopping 12 percent unemployment rate. While there are one million unemployed people in our state, less than half are receiving unemployment insurance. Nationally, profits have more than recovered from the worst of the economic crisis, raising 12 percent since 2007, but unemployment continues to grow.

So what gives, and why am I to blame?

It’s easier to blame me, the victim of our economic system, than it is to look for the real culprits, the ones with their hands in the cookie jar. And let’s be honest, the real culprits are the unrestrained finance industry focused on the quick buck and greed, rather than building a whole society.

By blaming me, big business and corporate interests are let off the hook. They are playing a dangerous game of taking advantage of public outrage during difficult economic times. By directing my neighbor’s outrage at me, it’s easier for them to slide out of their responsibilities as economic entities in our state.

This redirection distracts my neighbors, and even me, away from real solutions to the current crisis for workers in this state. We are put on the defensive, and more concessions are pushed by big business to offset the toll I am supposedly taking on them. In reality, these policy shifts that the business community is pushing for will harm the public structures in our state that protect not only unemployed workers, but all workers. By blaming unemployed workers, businesses are blaming all workers, when corporate interests are the ones setting agenda in our state.

Rather than blame me, business leaders need to work with legislative leaders and us unemployed workers to craft policies that create fairness, security and equality in our state. Until business stops kicking us while we’re down, we can’t be expected to get up off the ground.
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Rodriguez is now Administrative Assistant of Miami Workers Center.
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Copyright (C) 2011 by the Florida Forum. 3/11

TEXAS LONE STAR FORUM

By F. Scott McCown

Congress is now considering two important issues: whether to extend the Bush tax cuts and whether to extend the federally funded Unemployment Insurance program. To extend any part of the Bush tax cuts, particularly the high-end cuts, while cutting off Unemployment Insurance would betray hardworking Texans.

When a breadwinner loses a job through no fault of their own, they and their family are protected by Unemployment Insurance -- a federal-state program paid for by employers. The regular state program provides 26 weeks of benefits. Responding to the recession, Congress provided federal funding for an additional 67 weeks. But federal funding is running out, and if Congress fails to act by November 30, nearly 128,000 unemployed Texans will not get all or part of the additional weeks.

Both the public and history support extending Unemployment Insurance. A recent national survey shows 67 percent of the public are in favor of continuing Unemployment Insurance until the unemployment rate drops. And Congress has never allowed federally funded extensions to lapse when unemployment was over 7.2 percent. With the national unemployment rate well above 9 percent for 18 consecutive months, it’s far too soon for Congress to cut off Unemployment Insurance.

With the unemployment rate in Texas above eight percent for 14 consecutive months, Texas needs help as much as any state. Texas has almost 125,000 fewer available jobs than when the recession began in December 2007.

On top of everything else, if Congress cuts off federal Unemployment Insurance before it creates a sufficient number of jobs, Texas will face increased enrollment in our public assistance programs such as the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and Medicaid. Texas will be hard-pressed to cover its share of these increased costs because of our state revenue crisis.

Even though the case for Congress extending Unemployment Insurance is clear, two sticking points have emerged. Some argue that the unemployed need tough love to force them back to work by cutting off this “government handout.” But it’s way too soon for tough love.












The country has one job for every five people seeking work. And not every job seeker fits every job. Employers can be picky -- free to reject both the under- and over-qualified worker. Unemployment Insurance keeps the unemployed in the hunt, giving the economy time to create new jobs and workers time to get new skills.

Unemployment Insurance plays an important role in helping the economy maintain and create jobs. Unemployment Insurance allows Texas families to continue to pay their bills. For every dollar spent on benefits, approximately $2 is generated in spending. This spending supports Texas businesses, averting additional job losses and creating more jobs. Federal unemployment insurance programs have injected $5.8 billion into the Texas economy and have added an estimated $11.6 billion to our state’s Gross Domestic Product.

Nevertheless, some argue that Congress should not continue providing the additional weeks of Unemployment Insurance without spending cuts in some other part of the budget. But extending Unemployment Insurance would have virtually no effect on our long-term national debt because it’s temporary, and requiring off-setting spending cuts would actually be counterproductive because it would take money out of the economy.

Unemployment Insurance is far more important to our economic recovery than extending the high-end Bush tax cuts. The nonpartisan Congressional Budget Office estimates that federal Unemployment Insurance rates the highest in boosting the economy and creating jobs, while extending the high-end tax cuts rates the lowest.

Congress should provide an extension for a full year. Anything less is too little. And Congress should act now -- before the November 30 expiration of current benefits. Providing retroactive benefits in December is too late. Children can’t be fed retroactively. Congress needs to act to protect hardworking American families.
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McCown is executive director of the Center for Public Policy Priorities.
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Copyright (C) 2010 by the Texas Lone Star Forum. 11/10

FORUM

By Elias Feghali

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Feghali is communications director for the Tennessee Immigrant and Refugee Rights Coalition.
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Copyright (C) 2010 by the Tennessee Editorial Forum. 5/10