New York Times: Helping the Unemployed

Americans don’t have to wait for the statistics to know these are very hard times. For the fourth month in a row, the economy lost jobs in April. The economists said the contraction was not as bad as expected — 20,000 jobs were shed versus an anticipated loss of 75,000. Not as bad as expected is cold comfort.

The latest employment report shows other deepening problems for American workers, including slower wage growth, cutbacks in hours, a sharp increase in the number of part-timers who would prefer full-time work and lengthening spells of unemployment.

The White House response to the pain is to wait and see if things get even worse before calling for help for the unemployed. On Friday President Bush said that his administration had anticipated the slump and would combat it with tax rebates that were passed last February as part of the economic stimulus package.

There is no guarantee, however, that the rebates — which are just now being distributed — will spur the economy as hoped. Rather than spend the money, many indebted consumers are likely to use it to pay down debt, and some people, justifiably fearful of job loss, are likely to save it.

Besides, there’s no more time to wait and see. In April, the number of Americans who had been out of work for at least 27 weeks (26 weeks is when unemployment benefits run out) rose to 1.35 million workers. In the past year, 2.74 million jobless workers have exhausted their benefits.

Job loss is clearly a hit to families’ finances and, in the aggregate, to consumer spending and economic growth. Job loss coupled with the exhaustion of unemployment benefits leads not only to personal desperation, but will further damage consumer confidence, already sorely tested by the housing bust, the credit crunch and soaring prices for food and gasoline.

What is needed — now — is for Congress to extend jobless benefits for people who exhaust their initial 26 weeks of payments. Research is unequivocal that bolstered jobless benefits are more effective stimulus than tax rebates. They also have the advantage of being targeted to people in need.

The extension could be attached to the supplemental spending bill for the Iraq war, which may come before Congress as early as this week. Predictably, President Bush is balking, mainly because of his wrongheaded belief that tax cuts are the best solution to all problems.

The White House has also asserted that with the overall unemployment rate hovering around 5 percent, joblessness is not yet bad enough to warrant an extension of unemployment benefits. But in prior recessions, benefits had already been extended when long-term unemployment reached the current level. And in recent recessions, the unemployment rate didn’t peak until the recession was basically over. Waiting for the rate to rise before extending benefits is almost sure to result in offering too little help, too late — deepening the pain of the recession.

Congress erred by not extending unemployment benefits in last February’s stimulus package. Lawmakers and Mr. Bush now have a second chance to fix that mistake. They must not squander it.

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