For one in 10 Americans, today is a misnamed holiday
Labor Day 2009 is not a very happy day for millions of Americans who love to work.
In the United States there is a strong tendency to define people by what they do, and these are tough times for people who now define themselves by the unemployment check they receive. Nearly one in 10 Americans is now classified as unemployed. At 9.7 percent, that’s the highest rate in 26 years, and the rate is likely to crack the 10 percent mark before the end of the year. Next year, economists predict, the rate will start dropping, so it is unlikely to match the post-World War II high of 10.8 percent at the end of 1982.
It is likely that next Labor Day’s numbers will be better, but only marginally so. There is little question that full economic recovery is going to be measured in years, not months.
The economy that is challenging President Barack Obama is not unlike that which challenged President Ronald Reagan 28 years ago. Those record high unemployment figures that are being matched or nearly matched today were set during the first Reagan administration. Both inherited recessions, Reagan from Jimmy Carter and Obama from George W. Bush. When Reagan took office in 1981, the unemployment rate was 7.3 percent and rising. It hit its high of 10.8 percent nearly two years later, and didn’t return to 7.3 percent until 31‚Ñ2 years into Reagan’s first term.
That kind of time line is certainly disheartening. It shows that turning around a damaged economy is not an overnight job. But it is also encouraging, because it shows that the job can be done, but it takes patience and a political maturity that seems to have gotten away from the United States in the last generation.
There is little doubt that Obama is pursuing economic theories that are in stark contrast to Reagan’s. One of the few things they will have in common is the willingness to run up the budget deficits that come with their respective territory.
A political moment
One of the political tests facing Obama will be coming up soon as more than 400,000 of the unemployed see their unemployment benefits run out be the end of the month. That figure will more than triple by the end of December unless Congress authorizes another extension.
Legislation has been introduced to provide an additional 13 weeks of unemployment benefits in states with high jobless rates, which would include Ohio at 13.8 percent and Pennsylvania at 12.9. The bill, introduced by Rep. Jim McDermott, D-Washington, has 23 co-sponsors, including two Republicans.
There are those who argue that extending unemployment benefits encourages slackers to sit at home and collect a check, but that is an insult to most Americans. For one thing, unemployment provides only a fraction of a regular paycheck. For another, most Americans want to work (see earlier references to how we tend to define ourselves by our jobs).
But whatever the philosophical arguments may be, the fact is that people who receive unemployment checks don’t hoard the money, or invest it off-shore — they spend it, almost every penny of it. Meaning that almost every penny goes right back into our economy, helping to stabilize it.
On this Labor Day, Congress should resolve to approve an extension of unemployment benefits, not because its the right thing or the nice thing to do for families crippled by job loss, but because its the smart thing to do for the economy.
And it is especially important to people who live in high-unemployment states, which would, of course, include the Mahoning and Shenango valleys.