Center for American Progress Action
Melissa Boteach details why the fragile economic recovery requires the Senate to move swiftly to create jobs and help communities hardest hit in the Great Recession.
The Great Recession’s reverberations will be felt in communities across America long after the unemployment numbers begin to subside. In addition to the havoc unemployment wreaks on individual families, long-term joblessness tears at the fabric of entire neighborhoods and communities.
Children who experience hunger during a recession are less likely to be productive adults. Lost tax revenues cause states and localities to cut crucial public services, degrading the quality of life in local communities. Massive teacher layoffs attributable to state fiscal crises will affect an entire generation of students. And youth who are unable to find work will find that long gaps on their resumes will follow them throughout their careers, lowering their lifetime earnings.
The numbers are alarming. In May, up to 46 percent of the unemployed had been out of work for over 27 weeks. But these problems are not hitting all communities equally. There are dramatic disparities by race, age, and single-parent households. While overall unemployment in May was unacceptably high at 9.7 percent, among African Americans the jobless rate was a staggering 15.5 percent, among Latinos 12.4 percent, among households headed by a single mother 11.6 percent, and among youth 26.4 percent.
In short, long-term unemployment is a big problem that demands big solutions. The American Recovery and Reinvestment Act that President Barack Obama signed into law in early 2009 was a critical step to avert disaster and has already saved or created over 2 million jobs. But in an economy that is roughly 11 million jobs short of full unemployment, further action will be necessary beyond counting on today’s incipient economic recovery to create jobs more quickly than anticipated by most economists.
Unfortunately, Congress left for its Memorial Day recess without finishing its work on a pending jobs bill that would have saved or created over 1 million jobs and provided relief to communities hit the hardest by the Great Recession. That bill, The American Jobs and Closing Tax Loopholes Act, H.R. 4213, would have extended unemployment benefits to the end of November, spurring demand in the economy and saving hundreds of thousands of private-sector jobs. This jobs bill would also have provided funding for over 300,000 summer jobs and extended a program known as the TANF Emergency Fund, set to expire on September 30 of this year. Through partnering with the business community, the TANF Emergency Fund will have created approximately 185,000 new jobs for low-income and long-term unemployed workers by the time it is set to expire.
While these provisions will help all Americans, the bill will disproportionately assist the long-term unemployed and the communities that have been hardest hit by the Great Recession, addressing some of the major disparities in joblessness by income and race.
The original bill had included two other important provisions that offered relief to communities struggling in the recession: subsidies to help newly unemployed workers afford COBRA health benefits and fiscal relief to states in the form of Medicaid to preserve critical services and jobs. Without COBRA health benefits, the unemployed will struggle to provide basic health coverage for their families. And without fiscal relief, states will continue to cut public services that form the backbone of our communities. State budget gaps could also cause the economy to shed approximately 900,000 public- and private-sector jobs in the coming months as states lay off teachers, firefighters, and police officers, thereby undermining the nascent economic recovery.
Unfortunately, these measures were stripped out at the last minute due to concerns about the federal budget deficit. The Senate did not even hold a vote on the bill, instead choosing to adjourn for recess. This left unemployed workers high and dry, and local businesses wondering whether they should begin shutting down the job opportunities they had created through the TANF Emergency Fund.
Congress is in the grips of deficit fears, with a majority insisting that we cannot afford job-creation efforts in times of rising deficits. But the problem is we cannot afford not to invest in job creation. Not only does unemployment incur long-term costs for families and communities across the country, but the lost tax revenue from high rates of joblessness is significantly exacerbating our nation’s fiscal problems. The problem is long-term deficits, not short-term borrowing to spur job creation.
Congress needs to tackle long-term deficits, and President Obama has already acted to initiate that process through creation of a deficit commission. But Congress must invest in job creation this year, which is why the Senate must act swiftly to pass The American Jobs and Closing Tax Loopholes Act upon returning from recess, and include provisions such as COBRA health benefits and state fiscal relief. The economic and human costs of long-term joblessness are just too great for further delay.
Melissa Boteach is Manager of Half in Ten: The Campaign to Cut Poverty in Half in Ten Years at the Center for American Progress Action Fund.
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Senior Vice President, Poverty to Prosperity Program