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It’s the jobs, stupid

Photo: Flickr/srqpix

The Senate initiated a debate yesterday over the extension of unemployment benefits, which expired for more than 5 million people around the country last month.  These are people who have been out of work for more than 26 weeks. Last year, Congress passed an extension of benefits up to 99 weeks for states hardest hit by the recession. This year, however, Congress failed to pass an extension before it recessed for the Memorial Day weekend holiday.

The Labor Department’s disappointing jobs report, released last Friday, which showed that the private sector only added 41,000 jobs in May (far short of the 150,000 jobs that economists had forecasted) only underscores the tough conditions still confronting many Americans who are looking for work.

States around the country are left grappling with how to help the ranks of long–term unemployed citizens.  In California, more than 800,000 residents have been out of work for 27 weeks.   As Tammerlin Drummond reminds us in this editorial for the Oakland Tribune, “We haven’t seen these kinds of extended, chronic levels of joblessness since the Great Depression.” Frustrated by those in Congress who argued against passing the unemployment benefits extension, Drummond writes, “Congress had no problem, however, approving another $60 billion for the wars.”

There is a lot of anger and frustration out there — but there may be a bright spot.

For some, the silver lining of these historic rates of unemployment may be found in the growth of small businesses.  The Kauffman Foundation recently released a report that showed a historic growth in entrepreneurial activity for 2009. “Business start-ups reached their highest level in 14 years – even exceeding the number of start-ups during the peak 1999 to 2000 technology boom.”

Those are impressive numbers, considering the tightened credit markets, which has meant greater restrictions for the borrowing public.  The other surprising aspect to this report is just who these new entrepreneurs are. Instead of young tech savvy whippersnappers, most of these entrepreneurs are 35-to-44-year-olds followed by people ages 55 to 64.

But Robert Reich, former labor secretary under President Clinton, cautioned that these numbers don’t necessarily tell the whole story. He writes that many of these new “entrepreneurs” were recently forced into the ranks of the self employed after being laid off. For Reich, “it’s important to distinguish between entrepreneurial zeal and self-employed desperation.”

Reich proposes that Congress create safeguards to protect this new class of workers. Rather than just offer small business incentives, he urges the creation of new programs that help the growing ranks of the self-employed gain access to group health plans and retirement accounts.

We’ll see if Congress gets the message. But first things first: dealing with those that are still unemployed. This week, Congress is expected to pass an unemployment extension retroactively, and those 5 million people could get their benefits back.  But without the creation of more jobs, Congress will face yet another debate about the extension of unemployment benefits in the near future.

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  • mc

    In California, more than 800,000 residents have been out of work for 27 weeks. It is a fact.

    Without the creation of more jobs, where is the bright spot? There is none.

    Congress had no problem, however, approving another $60 billion for the wars.
    But how does the war in Afghanistan help improve the American economy?
    We are worried about balancing the budget. Taxpayers should think.

    We haven’t seen these kinds of extended, chronic levels of joblessness since 1929. Besides major banks have been bailed out using Taxpayers’ money. That is even worse.

    Only the Colleges and Universities can help us improve the economy by introducing Suitable Job Oriented Course Curriculum, not the Congress or the State Government.

  • R.T. Tillema

    To all Politicians
    When the hell are you people going to wake up! We feed, cloth, house, and educate many, many other countries because we are the big brother of the world!
    But you turn your back on your own fellow countryman when he or she needs a helping hand to stay off the poverty roles, a roof over their heads and food on the table for their children and spouse! you are crushing peoples years of hard work and catching up with the American dream while all you idiots play god with your “us and them games” When the hell are going to wake up for “the people who pay you”
    You need to extend the present unemployment until the end of 2010, and need to add a NEW TIER for the long term unemployed until “you brainchild’s” can figure out how get the old jobs back and generate new ones! Wake up, American’s won’t need health care fixed now? They need that tiny unemployment check to survive!
    R.T. Tillema aka Crusty
    Ocala, Fl.

  • mc

    I think we should seriously look at our present day lifestyle and do a thorough analysis. It is really worth watching some of the documentaries on President FDR. He handled the worst economic situation of his time. People were literally suffering and starving for food and desperately looking for jobs. That is when President FDR, gave a helping hand. He paid one dollar a day and made everybody work for the Government. He provided one of the basic needs food so that Americans can eat and work to the best of their ability. We should not forget that we were in the midst of World War II. Many good things came out of those bad economic times. Railroad Projects, Social Security, and other useful things came up that would help the American economy improve.
    We did not have Internet, Cell Phones or Television in those days. Even then American People believed in what President FDR said. They listened to his speech on the Radio and followed his suggestion and put his ideas to work.

    But today, we have the Information Super Highway; we are so advanced in Space Science; we use wireless Internet, Cell phone, iPhone, iPod, Digital Communications, Flat Screen Digital Broadcasting, etc. In spite of that, we are so backward in many respects. We are not able to manufacture or produce anything in this country. We still depend on the Third World Countries such as China, Korea, Guatemala, Mexico, etc….for our bed, bath and beyond. That is really sad.
    American School Children are so poor in English and Mathematics that an average American cannot even write Grammatical English or do basic Arithmetic Calculations.

    Our school system is not working as it should have been. That is why we are in a big mess today.
    Giving Free Education is also not a good idea in the long run. Public Schools should charge Tuition Fees to students attending schools. Students do not appreciate or understand the value of education when it is FREE. Only when there is a Fee or charge, then students will have some commitment to compete and complete.

    We need some kind of solid program that will work.

  • Hermes Birkin

    These are all great comments here. Very cool article.

    Hermes Birkin