“The end to federal jobless benefits for nearly 2 million people has sparked a bitter debate in Congress about whether Washington is abandoning desperate households or simply protecting strained government coffers.
It is also providing real-time answers to a question economists have long pondered: How do people survive when they suddenly have no money coming in?
Studies show that about a third of the people cut off from long-term unemployment benefits will find help from Social Security or other government programs. Others will cobble together dwindling savings or support from family. But most baffling to economists are the people who appear to come up with more-idiosyncratic solutions, which are tough to identify and almost impossible to track.
Take Wessita McKinley of Capitol Heights. The Maryland woman had to think outside the box after her contract with a local school board ended last summer. An Air Force veteran, she earned a six-figure salary as a private contractor before the recession. But she took a series of increasingly low-paying jobs as the economy soured.
Now that her unemployment benefits are gone, McKinley relies on what she calls “legal hustling” to pay her bills and keep her daughter in college: helping friends’ children fill out financial aid forms, driving friends on errands, entering data for small businesses—all for a fee.
[What do the jobless do when the benefits end?, February 11, 2014]
Wessita McKinley of Capitol Heights is unemployed and about to lose her jobless benefits. She runs a non-profit that among other things collects food for the working poor.
This particular unfortunate hardly fits the stereotype of a loser or slacker. In fact, she appears to have given her best to her country. These are precisely the kinds of people patriots should care about.
WaPo helpfully supplies this chart:
“There’s no shame in my game,” McKinley said. “If you’re not creative in this economy, you’re going to be squashed.”
Never in more than 65 years have so many workers been without a job and without a government lifeline. Congress cut off 1 million people en masse in December when it permitted a special emergency program for the long-term unemployed to lapse. Since then, their ranks have been growing by about 72,000 a week, according to the National Employment Law Project (NELP), which lobbies on behalf of the jobless.
On Tuesday, in testimony before Congress, Federal Reserve Chair Janet L. Yellen highlighted long-term unemployment as one of the central challenges of the U.S. economic recovery. Not only is it a sign that the labor market is still weak, she said, but it also shows that economic growth is falling far short of its potential.
The problem has also consumed White House officials, who worry not only about how to get these people back to work but also about how they get by. Former White House chief economist Alan Krueger said he once visited an off-track betting site in the middle of the day in hopes of finding cutoff workers and interviewing them about how they were supporting themselves.
“I still couldn’t figure it out,” said Krueger, who returned last year to his job teaching economics at Princeton University. He dubbed the phenomenon “the Kramer effect,” after Cosmo Kramer, the eccentric “Seinfeld” character who had no clear means of support.”[Links in original.]
Even Janet Yellen is talking about this!
People want to work. Being on the dole is not endemic to a class or an ethnic group. The panacea offered is, of course, education, but as I have recently noted, recent college grads are suffering too.
Folks, every paragraph in this article, and the terrible stories of personal distress it reports, screams out the message: STOP.
And while you’re at—let’s hope we can get some leadership from the White House to enforce our existing laws.
If President Obama really means what he says about limiting income inequality and caring for the unemployed, it should be no trouble.
Donald A. Collins [email him], is a freelance writer living in Washington DC and a former long-time member of the board of FAIR, the Federation for American Immigration Reform. His views are his own.