For many Americans the claim of an economic recovery is laughable. While there are now signs of a bounding stock market, low interest rates, and a strong housing market, this economy is marred by a “jobless recovery.” Even with the creation of 300,000 new jobs this March, we still had 2 million fewer jobs than in March 2001. In fact, since December 2003, the number of people unemployed for six months or longer has remained at a 20-year high. Even if the government assisted in creating the new jobs necessary to get us back to pre-recession levels, the individual worker is facing outdated and inadequate policies that are leaving working families with an insufficient standard of living.
This administration and its allies have been dogged in their determination to heal the wounds in the stock portfolios of the rich. Yet they have turned a blind eye to the hardships faced by the working poor and the unemployed near the brink of poverty.
The pernicious sting of poverty puts children at greater risk of poor health because they lack health insurance and access to health care; it increases the likelihood that children will fall behind in school, and leaves families unable to afford adequate housing, nutritious food, or child care.
There are clear actions Congress could take to improve the living conditions of working families. One solution is to increase the minimum wage from $5.15 per hour to $7.00 per hour. Congress has not authorized an increase in the minimum wage since 1997. An increase would assist 4.5 million households with 8.4 million children. The purchasing power of the minimum wage continues to erode, leaving low-income families to struggle with an increasing income gap. At $5.15 an hour working full-time every week, a family of three lives well below the poverty line. A minimum wage increase can help families pay for childcare, housing, food, and needed medications.
Congress continues to ignore the plight of working Americans by its failure to authorize an extension to unemployment benefits. In fact, Alan Greenspan testified before a congressional panel last week that “the strains that accompanied the difficult business environment of the past several years apparently still linger.” Greenspan agreed it would be a “good idea” to extend jobless benefits for the long-term unemployed. He noted that the “exceptionally high number” of people who have lost their benefits is now more than double the 35,000-per-week rate of exhaustion in September 2000.
Since December 2003, when the phase-out of extended unemployment benefits started, about 1.1 million people have exhausted their benefits and are not eligible for any additional unemployment assistance. Each week an additional 90,000 people have used up their state unemployment benefits. This number will increase by 2 million by mid-2004. Jobless parents left without extended unemployment benefits, along with their 622,000 children, suffer financial hardships. According to the Congressional Budget Office (CBO), these individuals and their families lose an average of $1,100 per month. In March 2004, the CBO reported that the “exhaustion rate” for unemployment recipients exceeded 43 percent, the highest rate ever recorded. Not extending benefits at a time when record numbers of people are facing long-term unemployment pushes more families into poverty and makes for poor policy.
Increasing the minimum wage and extending unemployment benefits are pro-worker policies that provide families with a living wage and offer support in difficult times. These are the kinds of common sense, economic growth policies that must be supported by our elected officials.
Saying people need to work is easy. Implementing policy that supports those efforts is the true demonstration of commitment.
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