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Republicans v. the Unemployed, Cont'd

Remember the idea of making unemployment benefits conditional on having a high school diploma? It's back – and it looks more offensive than ever.

If you read my colleague Tim Noah's blog, you know the background already. Unemployment benefits are currently available for up to 99 weeks, depending on where you live, because the economy is still growing slowly and jobs are still hard to find. But that extension will expire at the end of February unless Congress passes and President Obama signs a bill renewing it. Obama and his allies want to do it. The Republicans say they do, too, but only if the Democrats agree to changes in the program – among them, letting states deny benefits to workers who don't have high school degrees or the equivalent or are enrolled in classes to get one.

This debate first came up in November and December, when the extensions passed previously in the economic downturn were set to expire. The Republicans eventually gave in, as part of the same bill that renewed the payroll tax break. But both measures were for two months only: Now Obama and Congress have to agree on what to do after February – and Republicans are pressing their case again.

A new briefing from the Center on Budget and Policy Priorities makes clear just how pernicious that requirement could be. According to the Center, nearly half of all workers without a high school degree are older than 45 and more than a third are older than 50. It’s not clear that a high school degree will do these workers much good and, more to the point, it’s unlikely many of them could even get one. Waiting lists for high school equivalency programs are widespread, affecting three-quarters of the local programs and spanning nearly every single state in the most recent survey. And that data predates a 14 percent cut in federal funding for career, technical, and adult education in the 2012 fiscal year.

It may go without saying, but workers without a high school degree tend to be in low-skill, low-paying jobs. They're unlikely to have much savings, which means they're particularly dependent on those unemployment benefits. That's just one reason that Bob Greenstein, president of the Center, calls the proposal “appalling even by current Washington standards.”

But wait, there’s more! As an additional price for temporarily renewing the extended benefits, Republicans are calling for permanent changes to the structure of the program – changes that would loosen federal restrictions on how states administer the benefits. Under the Republican proposal, states could opt to use federal unemployment insurance funds for something other than benefits. The Republicans have also suggested that states be allowed to require that workers meet with caseworkers for “re-employment assessments.” 

That last part sounds reasonable enough and Obama has actually proposed something similar. But states would have to find money to hire the additional caseworkers. Obama called for the federal government to cover the cost, while Republicans proposed instead taking the money away from benefits, reducing unemployment checks by as much as 5 percent. In case you were wondering, those checks aren’t exactly generous in the first place: As of 2007, which is the most recent year for which data appears to be available, the typical recipient of unemployment benefits got a check that replaced a little less than half of his or her wages.

Cumulatively, these changes would not save the federal government much money, at least in the short term and according to the Congressional Budget Office. And already have considerable leeway over the size and administration of benefits.

That's not to say unemployment insurance couldn't benefit from reform. Most programs could. But the Republican proposals would undermine the basic concept of unemployment insurance. Remember, it's called "insurance" for a reason: Workers pay into the program, indirectly through employer taxes, so that they can draw benefits* when they are victims of management decisions or the business cycle.

Making benefits conditional on a high school degree would turn unemployment into a welfare program. The result, as Tim put it, would be to “further stigmatize and humiliate people whose sole offense to society is that they once had a job and then lost it."

*I originally wrote "withdraw" but that implies the program works, in effect, on a savings model. As reader "IowaBeauty" points out, that's not true. It operates on a social insurance model.