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Converting Unemployment Benefits to Employment Benefits

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On July 22, after a long and grueling contest of wills and words, the Senate approved the extension of unemployment benefits. As happens too frequently on Capitol Hill, this was a case of time, energy, and talent substantially misspent.

While the good senators were debating the pros and cons of extension, they continued to dodge and avoid the real issue which is addressing the jobs and economic crisis consuming this country. What we got was the extension of an unemployment bill that treats the symptoms of the problem when what we needed was a jobs bill that gets at the root causes of the crisis.

The jobs bill should be thought of as an employment benefits bill and an alternative to unemployment benefits. Unemployment benefits certainly have their place. They are necessary and their extension during extraordinarily trying times is essential.

They do not, however, create jobs, nor do they restore the dignity that only a job can provide. Moreover, unemployment benefits are insufficient to stimulate the increased consumer spending needed for an economic recovery.

Unemployment benefits unintentionally create a sense of dependence and personal helplessness. Employment benefits, in contrast, promote a sense of independence and self-sufficiency. Unemployment benefits are static. Employment benefits are designed to be dynamic.

Given this perspective, its time -- past time really -- for Congress to pass an innovative jobs bill which creates a program of employment benefits for the millions of Americans who desperately want to get back to work and to make a contribution to turning the economy and America around. This can be accomplished by engaging in outside the beltway thinking.

As a starter, here's one idea for consideration. Develop a new program that leverages unemployment insurance dollars to create new jobs. An example of how the program might work is having an employer agree to match or supplement the unemployment benefit payment made to a worker to be hired. This would do three things: (1) give the unemployment recipient more dollars to spend and meaningful work to do, (2) give the employer an expanded and enhanced workforce at a lower cost, and (3) address the need to get more money circulating in the economy.

Other ideas: Create an infrastructure renewal jobs bond program in which individuals and institutions can invest. Use these investments for targeted job creation to restore our nation's crumbling infrastructure. Expand the current payroll tax incentive program and give additional incentives or tax credits to businesses for hiring multiple employees. Have banks set small business loan targets and put a system in place to reward those that exceed them.

We need fresh ideas because we are in a pivotal period. The numbers are getting worse rather than better. And, there are few indicators to suggest any sort of turn-around within the foreseeable future.

The Federal Reserve's most recent beige book report released on July 28 indicated that economic activity was continuing to improve modestly overall but slowing down in regions of the country. This is not a good sign -- neither for the fledgling economic recovery nor for the American work force. The worse signs come from the workforce itself. Or, should we say the "workless force?"

Official government reports place unemployment at around 10 percent (9.5% in June to be precise). If those who have dropped out of the job-seeking market or who are under-employed are included, this number becomes closer to 20 percent. Add those working reduced hours or for reduced wages and temporary workers, and the number increases to at least 25 percent.

This sad situation seems to have barely grazed the consciousness of those in power. As the Center for Economic and Policy Research (The Center) noted in a paper released in July, "Many lawmakers, policymakers, and economic commentators do not appear to recognize the depth of our labor market recession." In that same report, The Center projects, "the economy will not return to the December 2007 employment level until March 2014... and will not catch up to the intervening increase in the labor force until early in the next decade."

This is somber news. It should be in bold headlines and required reading every day for our elected officials in Washington, D.C. As should the facts, that over 45 percent of the 14.6 million who are currently officially unemployed have been out of work for 27 weeks or longer and that over 1.4 million Americans have exhausted their 99 weeks of unemployment benefits.

These are stunning statistics but they don't tell the full cost of joblessness. Behind each statistic is a human story -- a story that tells the true tale of being without work. The person who loses a job loses part of his or her sense of self worth. The person who loses a job is knocked down a few rungs on Maslow's hierarchy. The person who loses a job loses part of the social network. The person who loses a job is less able to provide for those he or she supports.

If that person stays jobless for an extended period of time, the psychological and economic consequences can be enormous. There's more time to fill with less things to do. Stress can increase and abuse of self and others is possible. Self doubt and hatred is possible. Debt can increase. A home can be lost. A marriage can be broken or a family torn apart.

In sum, the continuing jobless recovery has and will have profound economic and social consequences. We can no longer afford to engage in business or legislating as usual. We need to act now. We need an act now. We need to pass a jobs bill that creates a program of employment benefits that puts Americans back to work rather than using them as pawns in a chess game of partisan politics.