The 99'ers Caste Class

According to an estimate by the National Employment Law Project, approximately 3.9 million people exhausted their unemployment benefits in 2010, despite a much publicized "budget agreement" between Obama and the Republicans that extended the time frame of benefits, but not the 99 week limit. This 99 weeks is 26 weeks of state unemployment and another 73 from the federal government.

It's about to get worse. In December, the Obama Administration estimated that another 4.1 million people would be losing benefits in 2011. Congressional Democrats have introduced a bill extending the federal part of it by another 14 weeks, but the House Republicans seem set against this. I don't believe this will pass. It's just another temporary bandaid in any case if you really look at it in a monetary sense. Today, however, I'd like to take a little time to explore the human cost of this Depression-Lite.

There are many who get unemployment who are simply sitting on their rears, enjoying their paid holiday. Quite frankly, my niece is one of them.. but not for long. As a member of the work force, I can tell you unequivocally that a major consideration for hiring these days is the length of time you have been unemployed. If your answer is over six months, employers begin wondering why.. is there a medical issue the company might become liable for by offering them insurance ? Do they think it's perfectly fine to sit for months on unemployment.. what if the employee does'nt work out any better than the last time they were employed ? Substance abuse ? In the eyes of an employer, there is no acceptable answer.. and the company simply moves on and hires someone else with a better work history. Millions of people are falling thru the cracks like this. My niece faces a far more daunting task than she imagines in finding a decent job once her own 99 weeks is exhausted.

Unfortunately for millions upon millions of people who's jobs are not coming back, there are few options. One thing that I personally see is a huge rise in the number of people applying for and getting Social Security Disability and also food stamps. Rhonda Taylor, a 42 year old "99'er" who lost her IT job in 2008, is in just such a situation. Her unemployment has run out; the only cash income coming in is her minor son's disability check, just over $600/mo, and another 400 or so in food stamps. The number of people getting food stamps (again) hit a record 41 million people. One in seven Americans needs help feeding themselves. "Life is just awful since the cut off" says Taylor.

Slowly but surely, America is going to have to come to grips with what to do with the large and growing underclass of people who have no realistic hope of bettering themselves. The number of Americans who work is 138 million.. in a nation of 310 million people. The unemployment rate (the "U6" measurement, which is much more accurate and thus the government stopped reporting) has stayed above 16% for most of 2010, and this will not change for some time. I fully believe that America's problems are not simply cyclical (meaning this is just a temporary recession) but are now structural. This 16% unemployment number is the new norm folks, and it will be for years to come I fear. We are slowly but surely evolving into a nation where the middle class is being squeezed out of existence and a new, large and permanent underclass has come to be. While unemployment and recessions have always been painful, the sheer scale of this "Depression-Lite" as I call it boggles the mind. The eight million people who's UE benefits will be exhausted last year and this are tragic; these are real people. In addition, probably twice that many people have had their wages slashed in one form or another since Lehman Bros went under.. hours cut, job change for the worse, etc. Worse, we as a nation this year are going to borrow $1.5 billion between state and federal governments.. about 1/10th of our GDP. Imagine how much worse it might've been had we not borrowed this money. Ultimately, we as a nation cannot continue to live beyond our means.. not only that, but at what point do we begin to repay this debt instead of simply always borrowing more ? I fear that despite the pain we're experiencing, it's going to get worse as time marches on, especially for the new underclass caste.