RSS
Home
UPDATE: Congress Votes to Extend Joblessness
Print
Email
RSS
Subscribe
Previously this week I wrote an article entitled “Congress Votes to Extend Joblessness” which has garnered quite a reaction, primarily a hostile one, from those who have read it. Most of those reactions took the form of personal attacks toward me and a couple actually attempted to use facts to refute the assertions that I made in that article. Now I am a big boy and do not mind when people personally attack me – after all it comes with the territory of being a journalistic commentator. However, when those personal attacks are blatantly false then I do feel the need to set the record straight.
So let me begin with all the comments from people who stated over and over again that I should be fired so that I would know what it is like to be unemployed and have to ‘walk in the shoes of others.’ The fact of the matter is that I have been in those shoes not just once but twice within the past 18 months. Therefore, I know exactly what it is like to be unemployed during this current recession, which most economists say officially started in December 2007.
In April 2008, I lost my job as Controller for a distribution company when the president of the company told me that he wanted to take that position in a different direction, which just happened to be one that did not include me. I was given two months of severance pay and had two weeks of vacation time accrued, so basically I had two and a half months of pay ahead of me before going without anything or resorting to applying for unemployment benefits. And given the situation, I was clearly eligible to collect unemployment benefits if I had wanted to.
However, by July 2008 I was offered a position as an Accounting Manager for a non-profit company. For those readers who referred to me as a heartless human being, most non-profit companies are those organizations that exist to help those in need. The company I joined served victims of abuse, primarily children. In accepting that job, I agreed to a salary that was over 20% less than my previous position. However, I recognized the tightness of the job market so I did what I needed to do in order to survive.
Six months after taking that job, I lost it after the company merged with another non-profit organization and my position was eliminated. This was on January 22, 2009 – two days after Inauguration Day. So I suddenly found myself unemployed for the second time in a 9-month span of time. Once again I was awarded two months of severance pay because of the circumstances and previous assurances that the merger would not affect my job, and I had two weeks of accrued vacation pay available as well.
Within two months, though, I accepted a temporary position at the distribution center for a major clothing line. The position carried no benefits and I was told from the beginning that it was highly unlikely to turn into a permanent one, but again I was doing whatever I needed to do to survive, keep my house and avoid being on unemployment benefits. In many ways, I used that temporary job as a life preserver to keep myself afloat until a permanent position came along.
In July 2009, I accepted a permanent position as the Finance Director for another non-profit company (the third non-profit company I have worked for in my career as a ‘heartless human being’). Amazingly this new position actually offered me a higher salary than the position I had lost back in January, but the salary was not the issue – getting a permanent job was.
Before accepting that job, I turned down a job offer from a different non-profit company as well as a position with a government entity, the latter of which had a salary that was over 10% higher than my current one. That is right - I had three different job offers within a very short span of time, so I know first-hand that there are jobs out there. Not every job these days is a dream job, but sometimes people have to do whatever they can to get by – which is exactly what I have been doing for the past couple of years.
So that should put an end to all of the ‘walk in the shoes of others’ stuff. As stated above, I have walked in those shoes not once but twice. I have survived so far through this long-term recession and I have done so without taking unemployment benefits. My salary today is 26% lower than the highest salary I have ever had. I have made the sacrifices I have needed to make in order to stand up on my own two feet.
As for some of the other comments, I never said at any point that I am against unemployment benefits in general, but rather that extending them will simply extend the jobless situation. Unemployment benefits are certainly important and necessary to help people in the short-term but now in some areas individuals can draw unemployment benefits for up to 99 weeks. That is almost two full years, and that is certainly far too long even in this current recession.
Finally, I will address the issue that one commenter made about the Heritage Foundation’s findings being refuted by a Harvard study. In researching that issue, I never found such a subsequent study. However, I did find a report that Larry Katz, a current Harvard professor, has now stated that his study done in 1990 (which essentially reached the same conclusion as the one from the Heritage Foundation) may not apply to the current recession because there are so many jobs lost.
I would argue that his comments are not a complete reversal of his previous study but rather it is a difference of degrees. Certainly when jobs are plentiful the natural tendency of people would lead them to be more lax about seeking employment than in a time when jobs are scarcer like they are in today’s economy. But the theory still holds because it is simply human nature. Someone stuck in a desert with a canteen half-filled with water is not going to feel as much urgency to find new sources of water as a person with an empty canteen. The same is true regarding the intensity of job seeking when comparing a person who still has some unemployment benefits remaining versus someone who has none.
And if the Heritage Foundation study or the one from Mr. Katz (who happened to be a chief economist in the Department of Labor during the Clinton Administration), are not convincing enough, there is this portion of a report from the Library of Economics and Liberty:
Lawrence H. Summers, chief economist at the World Bank, and chief economic adviser to Democratic presidential candidate Michael Dukakis in 1988, reaches similar conclusions. Summers, along with Harvard economist Kim B. Clark, found that unemployment insurance almost doubles the number of unemployment spells lasting more than three months, thereby encouraging long-term joblessness. Summers and Clark suggest that unemployment insurance benefits cause many of the long-term unemployed to have high "reservation wages." Translation: to accept a job, these unemployed workers insist on getting a high wage, and if they aren't offered that wage, they stay on unemployment insurance as long as possible.
For those who do not know, Lawrence (Larry) Summers is now the Director of the White House’s National Economic Council for President Barack Obama. He was also the Treasury Secretary during the final years of the Clinton Administration. Now again, the analysis by Summers was done in the early 1990s but the theory, if not the intensity, still holds true today. Given that, I wonder how many of those making comments about me would also consider Summers (and by extension Obama) to be a heartless human being who is carrying water for the Republican Party.
Finally, regarding my job as an Examiner writer, this is a part-time job for me, as should be apparent by now given that I have explained my full-time career path above. It is something that I enjoy doing and it helps to offset some of the lost salary that I have experienced in recent years. But I could lose this job and not suffer any major harm to my lifestyle and/or quality of life. However, since it is something that I do enjoy I hope to be doing it for a long time and am even hoping it could lead to bigger and better writing opportunities.
Finally, as predicted in my previous article, the Bureau of Labor Statistics released its new jobs data yesterday showing that more jobs were lost in October and that the unemployment rate now stands at 10.2%, the higher rate in 26 years. Despite that, also as suggested, this morning President Obama signed off on the bill to extend unemployment benefits. With the bill’s passage, expect even more job losses and increases in the unemployment rate in the coming months. And again, it is not just because it is bad economic policy, but more because it is simply human nature.
Rob Binsrick
More About:
Federal government
Related Articles:
Comments
Since the release of her new book entitled “Going Rogue” the popularity of Sarah Palin by her fans has hit stratospheric levels. Large and …
Recently former congressman William Jefferson, a Democrat from Louisiana, was sentenced to 13 years in prison for his conviction on charges of bribery …
