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Americans Fall Through the Safety Net as Slump Lingers
The US economic slump has lasted so long that more than half of the 14 million Americans without a job can no longer claim unemployment benefits.
Members of unions and Occupy Wall Street protesters take part in the "March For Jobs and Fairness" in New York. (Photo: AFP / Getty)
Only 48 per cent of the US jobless are receiving cheques, while 75 per cent were receiving benefits early last year.
The dramatic fall is despite the unemployment rate remaining stuck above 9 per cent and emergency measures put in place by Washington to stretch payments further than at any time since World War II.
As Americans have lost their benefits, the number claiming emergency food stamps has surged to a postwar high of 45 million, compared to 26 million at the peak of the 1990s recession.
Unlike in Australia, the jobless cannot remain in dole queues indefinitely. Only workers in the US who have been laid off qualify. College graduates and school leavers unable to find work are ineligible for assistance. In the current downturn, retrenched employees receive payments - typically, about half the median wage, or $US300 ($A293) a week - for a maximum of 99 weeks.
The period is derived from a complicated formula. Employers pay a state payroll tax that funds up to 26 weeks of regular benefits for workers who lose their jobs. Depending on the depth of the economic downturn, state governments are able to borrow money from the federal government to offer an extended benefits program. On top of that, Washington can enact emergency procedures to top up benefits further.
A combination of those provisions stretched total benefit payments to about 65 weeks in the 1974-75 recession, and to about a year in the downturn in the early 1980s.
US President Barack Obama managed to win approval for an extension of benefits in last year's push and pull with Republicans over continuing the George Bush-era personal income tax cuts.
But Congress will soon have to decide whether to continue funding Washington's share of the 99-week benefits program. Should it fail to extend the program, a further 2 million unemployed stand to lose their benefits come February.
As it stands, the program is ''uniquely generous'' compared to provisions during previous postwar recessions, says Gary Burtless, a labour markets specialist and Brookings Institution fellow. The shorter duration of previous slowdowns meant the longest average time that people relied on jobless benefits was 21 weeks in the early 1980s. By contrast, the average in this downturn is about 40 weeks.
''[The 26-week offer] was a good safety net for a shorter recession,'' Carl Van Horn, an economics professor at Rutgers University, told Associated Press. It assumes ''the economy will experience short interruptions and then go back to normal''.
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39 Comments so far
Show Allare we there yet ???
A Photo Essay on the Great Depression
http://www.english.illinois.edu/maps/depression/photoessay.htm
...peace...
As an amateur photographer, especially black and white, I hope more people will check out the site you posted. Good job.
I'd say we're pretty close, at least. Thanks for the link!
Great photos
"As it stands, the program is ''uniquely generous'' compared to provisions during previous postwar recessions, says Gary Burtless, a labour markets specialist and Brookings Institution fellow." So was TARP, I believe that TARP was "Uniquely generous" for the banks. If anyone is interested watch the Daily show on comedy central from last night I believe that truly describes generous.
This reference to a safety net is hokum. The unemployment benefits are funds people in the USA pay into as they do with Social Security. To say these people get benefits is silly. They get what they've already paid into the system. The type of safety net that other industrialized countries we've never had. We've had the half way form of such by having aid to those with dependent children, to the disabled. and to the aged and broke. That's not much of a safety net.
Exactly.
You want to know what the bedrock safety net program of the US is? Jail and prison! But a lot of people say thanks but no thanks to that free food, housing, and health care (laugh out loud).
Sleeping space beneath US bridges is getting as hard to find as a prison bed.
US uneployment insurance (UI) benefits are less generous today than they were during th 1974 and 1982 downturns that are cited in the article. Ronny Raygun's 1986 tax "reform" added an income tax burden to UI benefits.
Obama has told us that he is pushing for tax reform modeled after Raygun's 1986 reform.
In recent months about 100,000 jobs per month have been created in the States. Judging from the stock market (which is where the rich 1% “come to play”) I see that the American elites are pretty happy with 100,000 jobs per month. They are also relatively happy with declining real income for those who still have one or more jobs.
In general, this is a recessionary type of number. But put in the bigger perspective of the overall post 2007 jobs market, even the recent months do not shoot down the theory (and the reality) that this is a depression whose overall timeline will exceed a decade, not a mere recession which is already over. 100,000 jobs per month is not even enough to absorb all of the young entrants to the labor market let alone hire back those who lost their jobs in this depression.100,000 jobs a month does not come close to qualifying as a real recovery from the labor market collapse in the States.
Let me repeat that and slightly restate that for emphasis and for clarity: most of the American elites (the 1%) are happy even if not one single person (statistically speaking) ever gets back the job he or her lost after 2007. They don't give a damn even if every single person who lost their job after 2007 is PERMANENTLY unemployed--for the rest of their lives. (I had to spell that out very thoroughly to make sure anyone reading this understands how extreme the position of the far right 1% is.)
The bottom line is that the American elites are actual killers abroad and career / economic killers at home. Obviously, if you are permanently unemployed, your career, your personal economics, and most likely any potential business you might create, are killed dead as a doorknob.
The American elites will find out the hard way that you can't economically write off scores of millions of people and think they will simply disappear into thin air. What will really happen is that the economic ruination of those many tens of millions of people will help bring the overall US economy to total ruination. The written off scores of millions of people will play a big role in making it impossible to prevent the US deficit and the US debt from helping to ruin the US economy. Europe and globalism in general will help bring the US down as well.
With regard to the continuing far right ruination of the US economy, two of the most important signposts to look for in the coming years are (1) another stock market collapse and (2) the continued erosion and eventually the full erosion of the status of the American dollar as the world's reserve currency.
"far right ruination of the US economy" is really not an accurate characterization of what has happened.
The economic elites in the US don't even fall into the neat "left/right", "Democrat/Republican" dichotomy
In fact, with regard to economic decisions, they exist outside that dichotomy.
Their decisions are based on the bottom line -- how much money they will make.
Of course, they play the left/right game -- mainly to keep the pot bubbling (to keep "ordinary" Republicans and Democrats at each other's throats and distracted from issues that really matter)
What scares these elites most (the only thing that scares them) is the fact that OWS is NOT a left/right, Democrat/Republican phenomenon.
The elites (or at least the smart ones) realize that the jig is up the second ordinary Republicans and Democrats band together to oppose the REAL enemy (the elites themselves) -- as they have started to do.
tremaine's observations are correct, except that calling a permanent paradigm change a "decade long depression" is inaccurate.
The 1% not only don't care if you and I ever have a job, they hope we never get a job and all become slaves.
Jimbojangles, this is six of one, half a dozen of another. Anyone is free and welcome to look at the ruination as elite versus non-elite instead of left versus right. Left vs. right is historical terminology, which never goes out of style because, for one thing, history does repeat itself. Elite versus non-elite emphasizes the reality of who exactly is actually behind the ruination (the elites). Yet another one you might use (thanks to Occupy) is 99% versus 1%. Any argument about which terminology to use is just a tempest in a teapot.
I use all of these interchangeably but on more formal occasions I generally use left versus right to remind folks that it is right wing theories and policies that have brought the economy to ruin, not left. (There are countless morons in the US who don’t understand this; you see them posting comments on big corporation websites all the time where they blame “Obama the socialist” for the ruin of the economy. Whereas, if Obama really was a socialist, things would be far, far better)
Left theories and policies have never been tried on a large scale in the US. In Scandinavia and to some extent elsewhere in Europe they have been tried and they have worked, not perfectly of course (because there is no such thing as perfect when it comes to economics). But social democracy economics has worked well, especially in comparison to the right wing American system. As a result (and this is especially true post collapse) average people in Scandinavian countries are in general much better off economically than average people in the US.
So use whatever terminology you want (within reason) but always make sure you are on the right side of the argument (which is the left side of the argument, laugh out loud).
I have to disagree that terminology does not matter in this case, because the terminology is what defines the "sides" and hence the battle itself.
The fact that people blame “Obama the socialist” for the ruin of the economy is a perfect example of why terminology does matter.
People in the US have been conditioned to see things as a battle of "right vs left" (or what they perceive those terms to mean: effectively Republican vs Democrat) when in fact, it should really be viewed as a battle between elites (those who have most of the economic pie) and all the rest.
If terminology really does not matter, perhaps OWS should change their signs to read "We are the left" ("We get what's left"?) instead of "We are the 99%"??
The problem, of course, is that identifying your cause with either the "left" or "right" immediately alienates you from a large section of the population who might otherwise support your cause.
When I say "We are the left" it is exclusive and means something very different to most Americans (who have no knoweldge of the historical meanings of the terms right and left -- economic or otherwise) than "we are the 99%" , which is inclusive -- and a much more accurate characterization of the underlying dynamic, in this case.
tremaine, I was wondering which currency will take over for the dollar, in your opinion? With problems in so many areas of the world a replacement anytime in the next few years seems unlikely.
I think you are exactly right. No one can determine the what and the when for replacement of the US dollar right now. In general it is much easier in economics to predict that something will happen than to predict the when. Even predicting the correct decade is often very, very difficult. In general it is often difficult even to hit the broad side of the barn when it comes to timing an economic event even when you are virtually certain that the event is going to happen.
Pretty much everyone believes it will be 20 years rock bottom minimum before the US dollar is no longer the reserve currency. (The US debt and deficit are a big problem but they are not going to collapse the dollar in less than 20 years.) 40-50 years seems more reasonable and it could take 100 years.
Obviously, the Euro won't be taking over anytime soon (laugh out loud). And hardly anyone outside of China has any enthusiasm for a country that features only one political party (China) to provide the world currency.
Logically, the most likely scenario is that a World Currency (call it $W) will eventually replace the American dollar as the world currency. The $W will be based on (and I assume pegged to) several key legacy currencies including the dollar (which will still exist indefinitely even after the $W is created). An approximate analogy to this arrangement will be the relationship between the UN Security Council and the overall UN.
But again, you are right about how it will probably take a very long time for the US dollar to lose its status.
Excellent posts tremaine.
Politics runs on a dual axis, one left to right, the other top to bottom. The elites are laughing at those who struggle along the axis of left to right, as this struggle really only serves their axis, which froths wealth in an upward direction.
Basically, I see this as the typical pyramid model, with a circular motion within it, cycling the wealth counter-clockwise. The right does its job, funneling power and wealth reflexively upward (usually against the interests of the working class, of which it is a part), while the left does its best to cause the wealth to descend to the underprivileged.
The issue here is that left or right, if we concentrate on our horizontally situated adversaries, we are missing the more important axis which is vertical. In other words, politically speaking, the enemy of both the left, and the right, is the top. Problem is, the right seem to have a penchant for working for their own jailers and fleecers.
Americans of conscience, left or right, OWS or Tea-Party, MUST realize their opponents do not exist within the ranks of their horizontal equals, but within the ranks above them. We must learn to convince all workers and members of the Middle Class on down that the left-right dichotomy is emphasized in the mainstream media as a primary mechanism/weapon/tool that serves the 1% and keeps the rest of us divided.
Clearly this message needs to get through more to those on the right who are perennially deceived and scared into compliance and conflict with the left. But who will deny the same unhealthy dynamic coming from our side as well?
For socialism to work in America, my belief is that its adherents must figure out a way to embrace both conservatism and liberalism, while rejecting both neo-conservatism and neo-liberalism. The first two represent forms of opposition to feudalism, whereas the latter two are simply two opposites sides of the neo-feudalism which is taking over the globe today, and which finds its home with the American political duopoly we are supposed to vote again for in 2012.
The 99% is not composed entirely of leftists, iow. The 99% needs to figure out how to cooperate, and then the 1% will truly tremble, and then shortly afterwards, fall.
OT - The mysterious attacks on alleged Iranian weapons sites continues. What the heck is going on?
http://tinyurl.com/7lxl22r
The numbers will continue to fall as more people like me come to the end of UI. I thought I had read around 1.7 million drop off the roll in Feb 2012 that should be enough to lower this by another few points. The repugs won't extend UI because it make people lazy, like there are any jobs. The demodogs won't extend UI because they can run around saying everything is getting better just in time for the 2012 election if there is one.
Yes, and the only place these distinctions will be reported, that relate to the truth of the situation, are on the handful of progressive news sites, and/or in the comment sections where the best investigative reporting is done these days.
It is no wonder, given the dire scenario coming that doesn't take much imagination to see, that the Senate just voted for indefinite detention of Americans. Obama will sign that bill, even though he has "threatened to veto", as sure as the sun will rise tomorrow morning.
The numbers are already out. Anyone believe this?
from McClatchy
Jobless rate drops sharply to 8.6 percent in November
Read more: http://www.mcclatchydc.com/2011/12/02/131958/unemployment-drops-to-86-percent.html#ixzz1fR7brrq9
We need to re-define JOB. A job is not something you spend 8 hrs a day, 5or 6 days a week at, and still not be able to pay the rent and feed the family.
A JOB should pay enough to do these things and more, and allow the worker to have some satisfaction for his efforts, and maintain his dignity as a human being. That's what a JOB should be.
A job should also be self-actualizing, even the toilet-scrubbing jobs. It should also include a free pony or a free Volvo, according to the worker's choice.
Your smart ass remark belies your adherence to Reality Shrugged. This economy is not suited to any kind of virtuous "self-actualized" means testing, when it is evident, that millions of Americans who have incredible skills and are hard workers, have been reduced to vagabonds with children living in their parents and friends's homes ( my next door neighbors went from 2 people to 9) and rely on food stamps to get by.
Due to the fact that unemployment benefits have run out for the unemployed president Ofuckya is proud to announce that his jobs programs have succeeded and that there is no longer any unemployment in America. Change you can believe in.
"the program is ''uniquely generous'' compared to provisions during previous postwar recessions, says Gary Butthead, a labour markets specialist and Brookings Institution fellow."
But ... but ... but FluffoPo is reporting that the unemployment rate dropped from 9.0 to 8.6%!
So the "Free" Trade deals,tax cuts for the "job creators", and defunding of Social Security are working after all. And it's too bad that 300,000 more people fell off the "uniquely generous" unemployment rolls last month .... but they can be comforted by knowing that O's poll numbers are sure to go up as the unemployment "rate" goes down! So those without a job can keep warm all winter with that knowledge!
3 Cheers for our President!!! hip hip .......
The percentage of people in the labor force dropped from 64.2% to 64%. The lowest number since 1983.
The unemployment number only tells a sliver of the story.
Additionally, the average duration of unemployment rose to a new record 40.9 weeks from 39.4 weeks previously.
There are more Americans out of work than ever before and their numbers keep rising.
*** This information is from ZeroHedge
Oh happy day! The collapse of the EMPIRE is right before your eyes.
So far the collapse only affects the poorest half of the nation. No happiness yet. The richest will give up some of their gains. What form this will take is the question. Will they give up some money and power, or will they eventually live in fear of the 'rabble' breaking down their door and toss our quaint Constitution?
Think of the USSR.
The mainstream propaganda press is celebrating today's drop in unemployment figures but fail to report that it's primarily because more unemployed have run out of their allotted time for filing for unemployment, which doesn't show up in the statistics. Now they are the nameless, hidden, and irrelevant (to the government) unemployed.
Notice in all these articles the missing, "what next"? What happens next is called WELFARE. And do you know how much that pays?
The Democrats sure don't want you wondering why *that* amount is so low, as it was their neoliberal multi-millionaire BIG DAWG Bill Clinton who decided you could survive just fine on it. So just keep quiet, keep your filthy ass off the streets and parks of the 1 percent, and re-read the stories about Chelsea Clinton's $5 million wedding, courtesy of her dad, who sold out the working class and her mom, the Wal-Mart board-member. SUCKER.
If you don't like Occupy, feel free to join, or start, another movement. Bashing Occupy for not being what you want it to be seems--I dunno--ungrateful? Whiney? I'm sure that 87-year-old woman who was pepper sprayed by police for exercising her first amendment rights wasn't "play[ing]" protestor.
I say this as someone who agrees with your initial sentiment that everyone deserves a decent income. And also as someone who supports Occupy.
re: "a mass movement or just one with a few crazies running about trashing things out? "
Your distillation of the OWS movement?
Yeah, you've got a whole lotta helpful advice to give. OWS should pay you a high salary to be their leader and spokesperson, right away!
And maybe the OWS activists should also do all they can to avoid police confrontation by simply shutting their mouths, going home, taking a shower and getting a nice, low paying job? I'm sure that's something you can really get on board with!
Gee, I never realized until now how important avoiding anything unpleasant or uncomfortable could be to revolutionary victory! Thank you for the insight, Harriet of the 99...
What is this "confronting police" framing? Please. What, they should get the mayor to lay out some free speech zones for them?
Even if Occupy cannot be sustained the way we see it now (and it likely can't) it has already served a purpose. It has scratched the surface, just enough to create some fear and some new vocabulary in the media. People know that large numbers can and will gather.
The Corporatists are determined to recreate prosperity using China as the model. Want to get back to 9% growth rates? Then concentrate economic power into few hands; return to the old "Iron Law" of wages--only pay enough to keep them enslaved--with lots of surplus labor available, eager for any work at any wage. Merge the interests of Capital with the role of government. Voila! It still looks like America, but it feels like something else. Not so middle-classy, not so messy and populist, more establishment concensus, more control. In terms of robotic, neo-fascist efficiency, I like it. In terms of human rights and all that is decent, I'm afraid it's a hard sell.
Time long overdue for an Economic Bill of Rights.