Unemployment checks help everyone

Martin R. Cantor is director of Dowling College's Long Island Economic and Social Policy Institute.

There's been a lot of debate about extending unemployment insurance benefits so more will be able to receive the maximum 99 weeks already allowed. Democrats believe this is so important that President Barack Obama made it part of the tax-cut deal with Republicans, which the Senate passed yesterday and the House of Representatives is scheduled to vote on today.

Many Republicans believe that providing taxpayer-funded benefits for nearly two years is way too long, and that continuing to pay breeds a culture of people not wanting to work. When you effectively pay workers to be idle, that reasoning goes, what you get is idleness.

This idea of an idle labor force that would rather stay home and do nothing has been around for centuries. But for Long Island's unemployed - at 6.9 percent of our workforce - doing nothing has become maddening, leading to the loss of homes and personal bankruptcies.

Many of Long Island's unemployed are finding there's a mismatch between their skills and the jobs available in the current local economy; higher-paying and higher-skilled jobs are in short supply here. Then there's the question of how anyone can really get by here on the $400 weekly unemployment benefit. Long Island is one of the most costly places in the nation to live, and $400 per week is way below the median regional weekly income of $865.

Long Island's workforce has been beaten from pillar to post during the past 30 years. Globalization brought the first wave of economic change, washing away the very jobs Americans had once been trained to fill. Blue-collar manufacturing jobs were replaced by jobs requiring technological skills - skills that many Americans did not have. Long Islanders saw the manufacturing and back-office jobs that many held being exported to the Pacific Rim nations.

But because the economy was generally expanding during the first eight years of this decade, Americans were able to keep pace with the changes and obtain the skills required of the global economy. Unemployment rates dropped and Long Islanders found jobs. Our economy recovered, expanded and evolved structurally, so that technology, finance and real estate took the place of the region's once dominant defense-based industry.

While globalization caused structural changes to the domestic economy, the round of persistent job losses from the Great Recession is different. It can be blamed for the most part on the bursting of the housing bubble, which caused housing values to drop and depleted the equity that consumers could borrow against to fund their consumerism. But it has been exacerbated by consumers craving cheaper products. American manufacturing companies responded to this by seeking out cheaper labor, with American jobs being exported to parts of the world where labor is less costly. The result was the lower prices for goods that Americans demanded - but fewer working Americans to buy them.

Americans are demanding that these jobs come back to the United States - but we still shop by price. You just can't have it both ways; cheaper goods and domestic jobs are a paradox in American economic policy.

For the 28,000 out-of-work Long Islanders receiving unemployment benefits, these are critical issues. Their families rely on that meager weekly $400, but to survive they must also cut their budgets. The Long Island economy also benefits; much of those weekly unemployment checks is pumped right into the local economy. In a region struggling to recapture its lost economic activity, every dollar counts.

That's why it's important for Congress to extend unemployment benefits for another 13 months - which for jobless people in New York, would mean receiving up to 93 weeks of benefits. That money will find its way into the Long Island economy and will generate millions in state and local sales taxes.

While that economic impact is important, more essential is that unemployment benefits - though inadequate in the face of our high cost of living - provide at least a minimal subsistence level of financial support. They will help give Long Islanders without jobs the opportunity to keep their families in their homes, until the local economy once again begins creating the types of jobs these unemployed workers can fill.