Capitol Chronicle: Let Them Eat Dividends
The Bush White House rushes to the relief of unemployed stockholders
And so, faced with a staggering economy and a rising rate of long-term unemployment -- a problem that even the president belatedly acknowledged in mid-December -- it's no surprise how the president spells "relief." The centerpiece of the Bush "stimulus" package, a $674 billion boondoggle from the party of fiscal responsibility, is eliminating taxes on dividends paid to corporate shareholders. There's something you can take to the bank -- at least if you are among those that earn more than $200,000 a year, to whom half of this healing balm would flow. Few people who make less than $134,000 will be at all stimulated by this proposal.
Before we entirely lose sight of the pea, recall a few more urgent numbers. Nationwide, 750,000 unemployed workers exhausted their unemployment benefits Dec. 28. Another 95,000 are losing benefits each week that Congress fails to act. Long-term unemployment (more than six months) currently affects about 1.7 million people. Closer to home, 4,000 workers in Travis Co. exhausted their benefits three days after Christmas, and without further federal action, another 20,000 will do so by March.
House Republicans, who scuttled as "too expensive" a bipartisan Senate bill to extend benefits last year, say they will act this week. They'd better hurry. Their tough January work schedule, which began Tuesday, will be adjourned by the time you read this, not to be resumed until the end of the month.
Congress may have time for recess. Austin job seekers aren't so lucky.
"Jeepers," David Williams said quietly, "I've made hundreds of contacts, networking phone calls, the Internet -- they say there's a 96% failure rate there -- and nothing has panned out." Williams is 47 years old, married, has a 16-year-old daughter considering colleges, and 20 years of executive experience. He was laid off from his job at EDS as an account manager in applications hosting last January, with two weeks' severance. He used up both his basic unemployment and the initial 13-week federal extension in October. At $1,200 a month, the benefits barely covered his house and car payments; since then, he and his wife have spent their savings and their retirement. He had a lot of confidence at first that he would find something better. "I try not to take [the layoff] personally at all; I tried to see it as an opportunity. But the economy is so bad, nobody is hiring." He has enough to pay his bills, he thinks, through February; after that he doesn't know. "I've tried to keep my spirits up. My family depends on me."
Jonathan Byrd, 34, was laid off in August, after 12 years in sales and development at a small software company. Without an extension, his benefits will run out at the end of January. He moved to cheaper housing, has some help from family, and has accumulated "significant" credit card debt. "I spend three to five hours a day on the phone, networking, or applying for jobs," he said. "People say they'd love to interview you, you're highly qualified, but they're just not hiring." Byrd says it's small comfort that he has "a lot of friends in the same boat." "There's another 3,000 people here like you, [employers] tell me. I'm considering changing to another field, or relocating -- after UT, politics, and high tech, there aren't a lot of alternatives in Austin." One is taking any job at all, even if it means waiving further UI benefits. "There are a lot of really good, developed, skilled people," Byrd said, "who are going to end up just serving coffee."
Joshua Freeze had already relocated to Philadelphia two years ago, to work as a flight attendant for U.S. Airways -- among the airlines devastated by 9/11. Laid off last December, his UI benefits ran out last fall. He's moved back with his family, picked up some part-time work, professional as well as minimum wage, but found nothing permanent. "I'm a little better off, in that I'm a single man with no dependents," he said. Freeze is multilingual, with a wide range of work experience. "But there's just so many of us out there."
Setting entirely aside questions of compassion or community, one would think that politicians in search of economic stimulus might want to get money quickly into the hands of people who need to spend it, now. Instead, the sensibility of the current crop of conservative ideologues running Congress is succinctly expressed by Ed Potter of the Employment Policy Foundation, who told the Fort Worth Star-Telegram, "The downside of extending [unemployment benefits] is that it becomes perceived as an entitlement. The incentive that people have to seek work dissipates somewhat." I'd like to hear Potter say that to Jonathan Byrd, Joshua Freeze, or David Williams and his family.
One Democratic proposal called for a 26-week extension for all unemployed workers, but the bill passed Wednesday is limited to 13 weeks and will exclude more than a million workers -- like Williams and Freeze -- who ran out of benefits months ago. "They had time to put in a little help for Eli Lilly and for corporations that run offshore," said Austin Democrat Lloyd Doggett about his House Republican colleagues, "but not any ability to help people who through no fault of their own find themselves without a job."
In the longer run, there is talk of ending federal unemployment assistance altogether and throwing it back on the states, where many unemployment trust funds are already exhausted. That way the unemployed can more readily and docilely serve their historical function in a state capitalist economy: keeping labor costs down for business, and corporate dividends up for shareholders. As President Bush understands, those folks are in dire need of incentives to keep other people working for them.