This Labor Day, America's losing patience with unemployed workers

September 1, 2011
This Labor Day, America's losing patience with unemployed workers

By Tony Pugh | McClatchy Newspapers

WASHINGTON — As the nation celebrates U.S. workers this Labor Day weekend, many jobless Americans say they sense a growing indifference to their plight, and even a certain level of demonization.

For years, people who lost their jobs were the sad, sympathetic faces of the nation's economic meltdown. But more than two years after the Great Recession officially ended, America's empathy for the unemployed is showing signs of wear.

Many companies now shun the long-term unemployed when filling positions, fearing their skills have eroded or their talents don't measure up.

America's jobless also face increased hostility from conservative lawmakers, as more states cut the amount and duration of unemployment benefits, while making them harder to get and easier to lose.

In South Carolina, where state-funded jobless benefits were cut from 26 to 20 weeks, Republican state senator Kevin Bryant blogged in April that "Part of the unemployment problem is that our human nature is to take advantage of the ability to get paid to not work. ... I'm very sympathetic to those out of work desperately seeking it, but I'm disappointed that we have a significant segment of our society leeching (off) the system."

Similar comments from a variety of conservatives reflect a sneaking suspicion that 99 weeks of extended benefits have taken the urgency out of job searches.

"Two years is a long time. At some point you've got to provide more incentives to get people to do things," said Frederick Tannery, an associate economics professor at Slippery Rock University in Pennsylvania.

Similar concerns about long-term welfare recipients fueled a massive overhaul in the mid-1990s that refocused public assistance on getting people into jobs. In fact, many changes that states are making to their unemployment insurance programs were made earlier under welfare restructuring, such as restricting eligibility, cutting benefits and expanding the types of violations that could disqualify recipients from receiving benefits.

Last year, Sen. Orrin Hatch, R-Utah, even proposed drug tests for people who apply for welfare and jobless benefits.

The notable change in tone begs the question: Has America lost patience with the unemployed? And have extended jobless benefits caused some to view the long-term unemployed as the "welfare queens" of the new millennium?

"There are statements about UI recipients that are similar to statements about 'welfare queens,' and that shows a certain lack of sympathy with the situation of the unemployed," said Wayne Vroman, an economist at the Urban Institute who specializes in unemployment insurance. "Any human endeavor has people who game the system, but to attribute this as a massive kind of rip-off by the unemployed doesn't really match reality."

The reality is that the economy isn't creating jobs fast enough to re-employ the 8 million-plus who lost jobs in the Great Recession of 2007-09.

"People blame the chronically unemployed when, in fact, they're the victim of a much larger economic calamity that's beyond their control," said Harold Pollack, a professor at the University of Chicago's School of Social Service Administration.

Some critics blame unemployment benefits as incentives for sloth. During his 2010 campaign, Pennsylvania Republican Gov. Tom Corbett told a reporter, "The jobs are there, but if we keep extending unemployment, people are just going to sit there."

Corbett's comments, which he later said weren't meant to be insensitive, still resonate with Ahniva Williams, who counsels jobless people for the nonprofit Unemployment Information Center in Philadelphia.

"It enraged a lot of my members who were actively looking for work, volunteering, going to school, taking classes and going to job fairs," Williams said.

Charlette Pennington, who lives in a women's shelter, attends Williams' weekly job-search class. Unemployed for more than two years, Pennington was insulted by Corbett's comments.

"I'd like for him to visit one of these shelters and hear these women's stories," Pennington said. "He might change his mind."

After losing her job at a home-care agency in 2009, Pennington, 43, exhausted 99 weeks of UI benefits in June. She said she never got "comfortable" receiving unemployment insurance. That's why, during her jobless spell, she earned a hospitality-industry training certificate, worked as an intern at a hotel and volunteers at a community newspaper. She'll soon begin classes to become a nurse through a program that will help her daughters and her move into their own apartment.

"People collecting unemployment aren't lazy," Pennington declared. "We all want full employment, but sometimes it's hard."

Al Antanavage, an unemployed salesman in Alburtis, Pa., knows how hard it can be. Recently, a recruiter told him he'd missed out on a sales job because he'd been jobless for more than 90 days.

"I don't know where they get off thinking that if you're over 90 days unemployed, that you're a liability. That's what pisses me off," said the 53-year-old Antanavage, who was laid off more than a year ago. "We'll give $20 to a guy begging on the street with a cardboard sign and he'll run straight to the liquor store, but we'll bash people because they can't find a job? It's insane."

However, Mary Wilson, the owner of Michel Concrete in Springfield, Ill., said her experience with two long-term unemployed workers was an eye-opener.

Last year, Wilson hired a dispatcher and a truck driver, both unemployed more than six months. The driver quit after several weeks, claiming a number of minor grievances: She couldn't wear shorts on the job, felt unsafe while driving and didn't like her co-workers.

"Her comment was 'it just wasn't worth it to have to come into work when I was dissatisfied.' She would rather not work. She said that," Wilson recalled. The state ultimately cut the woman's unemployment benefits after investigating her case.

Wilson's dispatcher worked only a few days. He wanted to be fired, Wilson said, because he had a lawn-service business that paid him in cash. If he'd received a paycheck from Wilson, he would have lost his unemployment benefits, which he was collecting illegally.

"He kept trying to give me reasons to let him go and I wasn't catching on," Wilson said. "He was working the system."

Roughly 10 percent of jobless benefits go to undeserving recipients such as Wilson's former dispatcher, said James Sherk, senior policy analyst for labor economics at the Heritage Foundation, a conservative research center. Sherk said conservative efforts to revamp benefit programs were more about cost savings than making a value judgment on the work ethics of recipients.

"It's not that people who get unemployment insurance are bad, lazy bums. That's just silly. It's much more about 'Let's make sure it goes where it should be going and crack down on abusers,' " Sherk said.

Extended unemployment insurance has been the saving grace for millions of people who lost jobs in the recession through no fault of their own. The benefit programs — which are run by the states but financed by federal and state taxes on wages — kept 3.3 million people out of poverty in 2009.

"It's pretty clear at this point that it's good policy to have big UI extensions," said Jesse Rothstein, an associate professor of public policy and economics at the University of California, Berkeley.

Not everyone agrees with that. Recently Robert Barro, a Harvard economics professor, wrote in The Wall Street Journal that the unemployment rate would be 6.8 percent if jobless benefits hadn't been extended to 99 weeks. "We have shifted toward a welfare program that resembles those in many Western European countries," Barro wrote.

Traditionally, states fattened their unemployment insurance funds when the economy was strong in order to pay more benefits when a recession hit. But only 17 states, the District of Columbia and Puerto Rico had enough unemployment money to weather the economic downturn when the recession began in December 2007. That's because states had cut employer payroll taxes too much.

That poor planning, coupled with record job losses in the recession, led states to borrow more than $40 billion from the federal government to keep their jobless benefits flowing. To help replenish the depleted funds, employer jobless taxes rose by an average of 34 percent in 41 states last year, mainly because of mandatory hikes. But even those increases weren't enough to bring most state programs back to solvency.

So states that are struggling to pay back their federal loans and avoid costly interest penalties are left with two solutions: raising employer taxes further or reducing benefits.

Many states are opting for the latter, according to the National Employment Law Project, a research and advocacy organization for the unemployed. Only Colorado and Rhode Island raised employer taxes this year, said George Wentworth, the organization's legal counsel.

Lawmakers in states that include Indiana, Georgia, Michigan, Massachusetts and New Jersey gave employers tax breaks, either through direct cuts or by blocking or postponing scheduled increases in their tax rates, according to the National Employment Law Project. Earlier this year, South Carolina lawmakers reversed an employer tax increase after the business community complained.

Meanwhile, many states have quietly abandoned a 52-year tradition of providing state-funded unemployment insurance benefits for at least 26 weeks. Illinois and Arkansas now provide only 25 weeks. South Carolina and Missouri have cut their maximum benefit to 20 weeks, and Michigan will do the same in January. In Florida, jobless benefits will run only 12 to 23 weeks next year, depending on the state's unemployment rate.

Sherk, of the Heritage Foundation, said the benefit cuts were the best way to right the programs' finances without hurting job creation through higher taxes.

"Most states don't want to do anything that's going to harm the economy right now, and raising taxes, specifically taxes on businesses that hire new workers, may not be the optimal economic strategy," Sherk said.

But Vroman, of the Urban Institute, said most U.S. employers paid low state unemployment taxes and that the job-killing impact of higher rates was overstated.

The average cost of labor in the U.S. is about $30 an hour, of which unemployment insurance accounts for about 18 cents, Vroman said. That's less than employers pay for workers' compensation, Social Security Disability Insurance and retirement contributions.

Because of state benefit cuts, the newly unemployed in South Carolina and Missouri qualify for 17 fewer weeks of federal unemployment extensions, which are based in part on the level of state assistance. That means the maximum combined state and federal assistance in both states has fallen from 99 weeks to 77 weeks, as it will in Michigan beginning next year.

Sara Graham of St. Louis, who just lost her job as an environmental manager at an architectural firm, was unaware that she'd get only 20 weeks of state benefits and reduced federal assistance.

"It freaked me out," Graham said. "I just don't know what I'm gonna do. But I know why they did it. They don't have any money."

With a mortgage that's underwater, a car payment and no help expected from family, Graham, who's 35 and single, is doubtful that she can find a suitable job in 20 weeks.

And while she's eligible for federal extensions, it's unclear whether a budget-conscious Congress will fund another round next year.

Graham said it was unfair that lawmakers chose to rely solely on benefit cuts without raising business taxes.

"I don't even know why that's up for debate," she said. "I feel like the people making the decisions don't even understand what's going on with people that have lost their jobs. I just really think they don't get it. This is not a game of Monopoly. There are actual people involved, and their whole lives are completely disrupted."

Still, there's evidence that some people do game the system.

In studies of unemployment recipients in Philadelphia and Pittsburgh in the 1980s, Tannery of Slippery Rock found that nearly 30 percent either found work or were recalled to their old jobs within a week of their benefits expiring. That suggests many recipients were delaying their job searches until they'd exhausted their benefits.

A recent study by Rothstein of Berkeley found a similar effect, but on a much smaller level. More notable, however, Rothstein found that most people left unemployment benefits because they stopped looking for work, not because they found new jobs or were recalled.

"And that's much less worrisome" from a policy standpoint, Rothstein said. "What would be worrisome is if there were people that could find jobs, but didn't look very hard because they wanted to keep getting UI. And that looks like it's a small part of the effect."

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