TODAY'S QUESTION: How can the government best mitigate the effects of unemployment for Americans?

Thursday, December 10, 2009 | 12:01 a.m. CST

More than one million workers will lose their unemployment benefits in January unless Congress renews the stimulus act’s Emergency Unemployment Compensation program, according to a study by the National Employment Law Project and the Center for American Progress Action Fund.

States normally offer 26 weeks of unemployment insurance. The American Recovery and Reinvestment Act extended these benefits to between 34 and 53 weeks, the length of time determined by the severity of the state’s unemployment rate. In November, Congress increased the amount of time again, providing all states at least 14 additional weeks of benefits and states with unemployment rates 8.5 percent or higher 20 additional weeks. But the program was not renewed when coverage was extended. It expires at the end of the month.

Groups urging Congress to renew the benefits say that losing the aid could bring families on the brink to eviction and foreclosure.

If the program is not renewed, 53,048 Missourians will lose federal unemployment benefits between January and March, according to the study. Nationwide, more than 3.2 million will be affected.

The study also recommended that the American Reinvestment and Recovery Act’s Extended Benefits programs be expanded. If Congress doesn’t renew these permanent extension programs, they will end in 26 states. Missouri is included in this group of states that will only make the programs available if the federal government pays the bills. The stimulus also gives a $25 per week benefit to workers who have lost their jobs.

It will cost about $100 billion to renew the unemployment benefits and health insurance subsidies for the long-term jobless through 2010.

Last week, the government released numbers showing the rate of unemployment in November to be 10 percent, down from October’s 10.2 percent.

Despite reduced unemployment last month, economists predict that recovery will be slow and that rates will continue to rise until employers begin hiring aggressively enough to push them down. That might not happen until the middle of next year. Some areas of the country, including Kansas City, that have technology, health care and government jobs might recover more quickly.

Columbia’s unemployment dropped to 5.9 percent in October. That’s down 0.4 percentage points from September’s 6.3 percent.

How can the government best mitigate the effects of unemployment for Americans?



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John Schultz December 10, 2009 | 10:07 a.m.

Maybe government isn't the solution?

(Report Comment)
Mike Sykuta December 10, 2009 | 11:52 a.m.

Perhaps the government could mitigate the effects of unemployment by removing the barriers employers face when considering hiring more people.

One of the biggest impediments to new job creation in this country right now is the expectation that businesses are soon to be saddled with very expensive new regulatory burdens. A recent (Dec 8) editorial in the Detroit News explains the problem pretty well.

Consider the EPA's 'endangerment' ruling earlier this week on greenhouse gases, unilaterally opening the door for the EPA to impose regulations on virtually every kind of activity that produces one of the five greenhouse gases listed in the ruling, including the CO2 that humans and animals exhale. Even if not taken to extremes, the potential costs for businesses of all sizes are potentially huge.

The cost (and uncertainty) of proposed health care legislation is yet another shoe waiting to drop on the earning (and hiring) potential of small and medium size businesses. Not to mention institutionalized pay raises mandated by the ever-increasing minimum-wage level (especially in Missouri since passing Prop B).

The best way to mitigate the effects of unemployment is to reduce unemployment. The best way to reduce unemployment is to encourage businesses to form, grow, expand, and hire new workers. The current administration seems to be doing everything in its power to do just the opposite, and trying to hide the fact by pumping huge amounts of money into the economy, the inflationary effects of which we are likely to "enjoy" over the next 12 months.

(Report Comment)
Ayn Rand December 10, 2009 | 12:32 p.m.

Businesses won't hire until they need to. That's just the way it is even in flush times.

The only difference now is that there's too much uncertainty about how their tax and health insurance liabilities will change next year. The only thing that the government should do at this point is eliminate that uncertainty.

Until that happens, most will maintain their current staffing levels and pay overtime to existing workers to accommodate increased demand for their products and services.

(Report Comment)

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