Americans relying on unemployment

Millions of Americans are seeking jobs while relying on unemployment checks to sustain themselves and their households in the meantime. In the past, unemployment pay was set to last for six months, the official insurance limit on the program. However, difficulties and a down economy have forced the federal government to extend payments to as long as 99 weeks in some states. That’s the longest period unemployment has ever been extended since its inception.

The critics weigh in

Unemployment benefits are not being extended without criticism. There is now a political debate over the extensions. The cost of unemployment is $10 billion a month for the government and many legislators are questioning the move. Senator Jim Bunning recently made moves to extend benefits, but was attacked by Congress members who believe the cost is too high for the nation. For example, Senator Jon Kyl believes that extending benefits does little to encourage people to find work. They may become lax in finding jobs and seeking to change their financial positions.

The numbers speak for themselves

Despite Kyl’s position, the numbers on unemployment are showing otherwise. The National Employment Law Center showed that the main reason people are out of work is not due to comfort. There are six unemployed Americans for every available job in the market. In addition, many of the Americans who are looking for jobs are not qualified for the positions in need of filling. Those who are seeking payday cash are looking in as many different places as possible. Desperation is pushing people to consider job options they may have previously overlooked.

Unemployment compensation

Unemployment benefits were created in 1935 as part of the Social Security Act. The purpose of the fund was to sustain the unemployed as the economy wavered. Throughout the years, it has proven effective and helped millions of Americans pay bills, stay in their homes and remain financially afloat until new jobs became available. Studies have shown that about 67 percent of unemployed people take advantage of the fund. The bulk of the fund comes from employer taxes, but in times of unusual financial stress, the funds have been extended then scaled back when things return to normal.

The verdict on unemployment and its extension

Despite some debate, the decision to extend unemployment is most likely going to remain intact. Most people use unemployment checks the same way they would use payday cash. They put the money directly back into the economy. Due to a lack of discretionary spending, most of their unemployment check is channeled right into the market. That is the overall goal of the government-to spur people into spending and reinvigorating the economy.

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Senator Jim Bunning (R – Kentucky) (Photo: Wikipedia)

There was a time when Jim Bunning was feared. As the star pitcher for the Detroit Tigers (1955-1963) and Philadelphia Phillies (1964-1967), the big right-hander would rock back and fire his sidearm fastball and slider at overmatched hitters. For a pitcher with excellent control, it is telling that he hit more batters with pitches than any other hurler in the 1960s. In his mind, the plate belonged to him. If a batter dug in too close, they were going to have to dodge a bullet. In baseball parlance, he was “filthy” in more ways than one.

From the mound to the Senate floor

Jim Bunning’s work on the mound earned him a big pay day into baseball’s Hall of Fame in 1996. After his playing career ended in 1971, the big Kentuckian worked his way into politics. By 1986, he was a state Representative, and in 1998 he secured a spot in the U.S. Senate. If Bunning’s approval ratings are any indication, the fear he once commanded on the mound have permanently been replaced by loathing.

Which leads us to his recent Senate elevator caper

As he was preparing to head to the Senate floor, ABC News caught up with Senator Jim Bunning and asked him about his recent decision to block a bill that would extend unemployment benefits to long out-of-work Americans who need cash now. Not only did Jim Bunning refuse to answer the question, but he screamed at reporters “Excuse me! This is a Senators only elevator!” Then, when asked if he was concerned about unemployed Americans losing their benefits, he reportedly made an obscene gesture.

His conservative colors don’t run

Apparently, Senator Bunning was not in favor of the bill because it would add to the national debt rather than be paid for out of existing funds. His preference, according to ABC, is to use unspent stimulus funds.

“I support extending unemployment benefits, cobra benefits, flood insurance, highway bill fix, doc fix, small business loans, and distant network television for satellite viewers. If we can’t find $10 billion to pay for something that we all support, we will never pay for anything on the floor of this U.S. Senate,” he said.

Ideally, I agree with Bunning’s reasoning

While I do not support letting people twist in the wind when they have children to feed and the American job market remains unresponsive, I also would like to see such a program paid for at the outset, rather than creating more debt. Such a thing simply gets passed on to each successive generation, with no end in sight. But how long can the unemployed whose funds are dissipating wait?

Needless to say, Jim Bunning isn’t popular these days

His record of Senate votes is rather conspicuous by the amount of absenteeism. According to Wikipedia, Jim Bunning was “the only senator to miss the Senate’s historic Christmas Eve 2009 vote on the health care reform bill.” Furthermore, his tally of 21 missed December votes is “one more than the 20 missed by 92-year-old Sen. Robert Byrd, D-W.Va., who is ailing and in a wheelchair.” Maybe Jim Bunning subscribes to an old baseball adage applied to position players the Dominican Republic: “You can’t walk off the island.” In Bunning’s case, however, he can seem to walk to his seat on the Senate floor.

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Shoppers in the Washington D.C. area will have to spend more money on each trip starting Friday, January 1, 2010. These additional costs, which are part of a new plan by the administration to close the gaps in budgets, will send them racing for more payday loans. To the already burdened consumer, this will no doubt be another cost that they will deem unnecessary. However, they will have to live with the additional expenses as part of their own budgets, and will need to figure out how to make it all work.

Shopping Trip Charges

Under the new scheme, which the administration is calling a “nickels and dimes” policy, shoppers will have to pay $0.05 every time they shop and request a shopping bag. Groceries, drug stores, liquor stores and retail outlets are all expected to add this charge on consumers’ bills who have forgotten to carry a shopping bag with them. This charge will apply to every paper or plastic bag handed out by the shops, but this is not the only part of the policy. By mid January, more people will have to pay over $2 an hour to park their cars, which is sure to put an additional burden on consumers who were already looking to save their nickels and dimes. These plans are sure to make shoppers stop at their neighborhood lenders office looking for a payday loan. Of course, planning will help to eliminate this burden by bringing along their own shopping bags.

Fund Raiser Scheme

The administration claims that this scheme was designed to raise money for the various assistance programs that help people affected by the recession. Many states are already burdened by too many unemployment benefits and are experiencing a shortage of funds. It is under these circumstances that they are looking to raise additional funds from the very consumers who may be the same people they want to help. It’s not just the shopping bags and parking fees that the administration is looking to charge money for, but also on overdue library books and car pool permits. Taxes have already been increased on cigarettes and gas, and the city expects the 14,749 parking spaces, charging $2 an hour, should make up for their deficit. Increasing the costs of shopping will mean that the consumer must budget for more money that will turn into another rush for more payday loans.

Right Idea, Wrong Time

States are looking to enforce these charges because they are facing huge deficits in their budgets. Job losses and unemployment benefits are leaving them with no other choice but to increase charges for common items. At the same time, restaurants in the area are complaining that these charges will only keep their customers away and cause further losses, and as free parking time on the weekends is reduced, the restaurateurs have a point. Consumers will be paying more money for the same services they were getting for free before, and will look to cut costs, including eating out. They will also look to take out payday loans to cover for the shortage in cash.

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Unemployment Benefit Claims Decrease

The labor department in Washington reports that unemployment benefit claims have been decreasing since September. Money lenders will be happy at the recent turn of events, as it means that people who want to take out loans now have jobs with a regular income. Those who are looking to borrow money will now have the security of knowing that they can pay back the loan when it is due.

Labor Department Claims Founded

The labor department has been keeping a close watch on the number of unemployment benefit claims coming in each month, and have seen a steady decline in the figures over the past four months. Latest figures available indicate that claims for benefits fell to a seasonably adjusted figure of 432,000, the lowest it has been since 2008. Economists expected the figures to stay at 460,000, but have been proven wrong this time. It also indicates that there are more jobs available in the market now compared to last year. Unemployment benefit claims had risen to 674,000 back then, and looking at the current figures, one can only hope that the future remains positive.

Companies Want to Create More Jobs

Economic experts report that 40,000 jobs were created in December after 11,000 jobs were cut in Noevmber. If this encouraging trend continues, those who are unemployed may be able to look ahead to a great year, and it will only ensure that people no longer must rely on unemployment benefits or payday loans to make ends meet. Companies want to create more jobs locally, rather than just look elsewhere to get cheaper sources of labor. After people have been supporting these companies through the worst of times, they now need the companies to support them through job creation and stability.

What’s In It For Me?

If you have a job, you can look forward to receiving a regular paycheck, making your life easier. If necessary, you can also apply for a payday loan to meet your immediate requirements that you may have. While this situation may not change dramatically for most people over the next few months, there are still people who must wait for a while before finding a job. The job market may look upbeat in Washington, but the story is not the same in the rest of the country. There are millions of unemployed people who are still seeking their unemployment benefits, which are putting state assistance programs in jeopardy. The Obama administration estimates that nearly 4.9 million people are still receiving benefits across the country. Therefore, it can be safely assumed that the decrease in unemployment claims is limited to a particular region of the country.

Hopes for a Good Year

If companies across the country use the example set by Washington and create more jobs, there will soon be a great increase in many more jobs across the country. More people will be employed, as well as spending more money, perhaps wisely. Should they fall short of funds at any time, there is always a payday loan available to help out.

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I’m headed to New Zealand, because I have cash today, thanks to an online payday advance. Plenty of people will call that irresponsible, but plenty of people haven’t walked in my shoes. If you’ve been through the economic wringer in recent years, maybe you’ll get it. Or maybe you won’t. Either way, I’ve got money now and I’m going.

After two layoffs, I have money now

Two years ago, I was laid off from a good-paying job I’d had for several years. I collected unemployment for a few months and watched my retirement and investment accounts melt away like everyone else’s. I found a new, lower-paying job, but was laid off again after just a couple of months. This time, I didn’t qualify for unemployment benefits. After seven months, I was tapped out and couldn’t make my mortgage payment.

My head is barely above water, but I have money now

I managed to avoid a foreclosure with a lender-approved short sale, but everything I owned – other than my paid-off car and some beat-up furniture — was gone. I gave the furniture away and moved in with some friends. I finally found yet another even lower-paying job, and a couple months later, I was able to rent the apartment I have now. Luckily, I cut up my credit cards when I lost my first job, so I don’t have debts. My head is above water, but I’m still struggling to make ends meet.

The weather in New Zealand is perfect, and I have money now

I’m not in a stable financial place yet, but I’ve had my job long enough to get a personal loan. Now that I’ve got a little extra cash, I’m taking my life off hold. The coastline and mountains of New Zealand defy description. The whales are amazing. People say the Sauvignon blancs of the Marlborough region are better than the ones they make in Napa Valley. The air and water temperatures are perfect this time of year, and New Zealand is still a dollar-friendly place.

I have 23 hours plus a weekend, and I have money now, too

Last week I hit 23 hours of accumulated vacation time. Last night, I applied for an online payday loan. I had one in five minutes flat. The money was in my bank account this morning. I’ll pay it back out of my next paycheck and worry about how I’ll get by when it comes to that. Twenty-three paid hours plus a weekend isn’t at all enough time to visit New Zealand. Mostly I’ll be sitting on a plane. My grandmother is 94. I haven’t seen her in six years. She lives in Ashburton on the South Island. I fly out tomorrow morning.

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Larry Summers

President Obama’s top economic adviser, Larry Summers, said in a speech today that he believes the $787 billion economic stimulus plan is already working. He spoke at the Brookings Institution late this morning.

He says jobs have already been saved and consumer spending seems to be stabilizing.

Too soon?

Summers acknowledged in his speech that it was a bit early to be measuring the effects of the stimulus package. But, commented about consumer spending anyway.

“It is modestly encouraging that since it began to take shape, consumer spending in the U.S., which was collapsing during the holiday season, appears, according to a number of indicators, to have stabilized.”

Too soon, according to me

While it’s true that consumer spending isn’t plummeting the way it was during the last half, this “stable” period has only lasted for possibly eight weeks so far. Final reports aren’t in for February yet. Also, while consumer spending has stayed at about the same level, that level is very low.

If consumer spending does stabilize at this level, the economy will remain weak. We’re a long way from the days people used personal loans for unnecessary items. We need to find a balance between extreme frugality and irresponsible borrowing before the economy will truly be stable.

Jobs saved

Summers also pointed out that the economic stimulus package has already saved jobs, one of its main goals.

“Already, [the stimulus plan's] impact is being felt by cops and teachers who would have been laid off but whose jobs have been saved; it may retain14,000 teachers in New York alone.”

This is a much better indicator of concrete effects that the stimulus package has had.

Coming attractions

Summers also reminded the audience of the changes that will soon make their way into Americans’ pockets. Some could already be collecting extended unemployment benefits. Working Americans will see a little extra cash in their paychecks when withholding schedules are adjusted.

Monica Rhor reports for the Associated Press that Texas Governor Rick Perry has rejected a $555 million federal stimulus payment that would have expanded his state’s current unemployment benefits. The reason he gave for the rejection is that the money “would have required the state to keep funding the expanded benefits after the stimulus money ran out.”

Perry, who has made it known that he does not support President Obama’s $787 billion stimulus bill, did find it within his heart to accept most of the $17 billion given the Lone Star State.

Don’t drive employers away from Texas

Accepting the payment, says Perry, would require Texas to change their definition of unemployment. They would have to cover more people and place a greater tax burden on employers. That would be a great way to drive some of them out of Dodge…

Perry said accepting this would not create jobs, but limit hiring and raise prices. Coincidentally, limiting hiring would limit payday loans.

“During these tough times, Texas employers are working harder than ever to move products to market, make payroll and create jobs,” Perry said. “The last thing they need is government burdening them with higher taxes and expanded obligations.”

Keeping Texas in the black

According to Rhor, Perry’s decision was made despite the danger that Texas’ unemployment compensation trust fund could “be operating at a deficit by October.” Texas Workforce Commission Chairman Tom Pauken told lawmakers that insolvency “might not be not far behind.”

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