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North Carolina’s Lessons for Unemployment and the GOP

Despite the recent words [1] of Paul Ryan, Marco Rubio, and Mike Lee, the GOP currently has little credibility when it comes to improving the lot of the poor and downtrodden. In the last election, Mitt Romney lost [2] four to one [3] among voters whose most important perceived candidate quality was who “cares about people like me.” This represented a fifth of the electorate, a share that may only increase as our economy limps through a tepid recovery. By transforming “limited government” from the means to an end to an end itself, Republicans lost the vocabulary of human flourishing—and what stale budget talk and appeals to principles [4] remain won’t rebuild conservatives’ appeal to the economically anxious.

The recent debate over extending [5] unemployment benefits [6] is a case in point. Republicans mostly dropped the argument about the potential trade-offs [7] between helping individuals and serving the long-term health of our economy—a welcome development given the depressing statistics economists like AEI scholar Michael Strain [8] have compiled: of all unemployed workers, over a third have been unemployed for more than 27 weeks, double the share we saw during the recession of the early 2000s. Today there are approximately three unemployed workers for every available job opening [9]. No wonder more than 350,000 workers opted [10] to leave the workforce, making today’s labor force participation rate the lowest [11] since April of 1978.

Then the debate moved to the cost—$18 billion, or approximately one-half of one percent of overall federal spending in 2013, then to procedural objections and the perfidy of Harry Reid. Yet at no point has a substantial majority of Republicans rallied behind a set of policies that would address the plight [12] of the long-term unemployed.

Admittedly, part of the problem is the inherent challenge [13] for a party out of power to rally around a substantially new, coherent agenda. Ryan and company are helping to fill that vacuum with their own policy solutions, and one can imagine that with a Republican in the White House, a similar agenda could get passed.

change_me

But the experience of my home state of North Carolina should give one pause. With control of both houses in the General Assembly and the Governor’s Mansion, the GOP passed many far-reaching reforms [14] ranging from the tax code to education, none of which grappled with the structural [15] problems facing the state’s economy. Rhetorically, GOP leaders and their surrogates stuck [16] to [17] abstract financing issues [18] and small government [19] talk. They rarely defended policies by appealing to a vision of the good life for North Carolinians that resonated with anyone outside the conservative fold.

Their strategy hasn’t panned out. The unemployment benefits reform was already controversial, since state leaders could have continued the benefits for the current long-term unemployed even as they reaped the same fiscal benefits had they just been willing to seek a mere six-month delay and a waiver from the Department of Labor. The unemployment rate has decreased six months later, but the drop [20] appears to stem more from marginally-attached workers leaving the workforce than from unemployed workers finding jobs. Voters aren’t pleased. Governor McCrory hasn’t [21] recovered in the polls, and likely GOP Senate nominee Thom Tillis is trailing [22] Senator Kay Hagan even as President Obama’s unfavorability rating sits at a solid 55 percent.

Fiscal responsibility is important, but small government talk alone won’t cut it. Like it or not, the federal and state governments can target some of the root causes [23] of poverty and economic hardship. Republicans need to start taking cues from Ryan, Rubio, and Lee to thoughtfully confront the challenges our society faces today: the decline of institutions like the family and local communities and the continuing struggles of segments of the workforce still grappling [24] with our post-manufacturing age. Addressing the needs of the long-term unemployed would be a good place to start—lest some Congressional Republicans find themselves out of a job this November.

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#1 Comment By Frank Stain On January 17, 2014 @ 12:22 pm

Although I have absolutely no sympathy for the GOP position on this, in a sense I think they are right. The rationale for the three month extension is that it offers those people a bit longer to find work matching their skills and qualifications. But of course, those jobs are still being systematically dismantled, shipped overseas, or stripped of the benefits like health care and pensions that used to make them good jobs. What the GOP is essentially saying to these people is: Lower your expectations. Take one of the crappy, low-paying, unstable hours, no benefits jobs that are out there .
And here of course we come upon what has been the core of the GOP strategy for ‘economic growth’ for decades. Weaken labor laws, weaken unions, slowly abolish the notion that employers or the state have a responsibility for supporting employees when they are sick, when they are too old to work, or when family responsibilities make it impossible for them to work. People on the upper rungs will do okay at first when the bottom falls out of the labor market, but the same things will come their way eventually. They already are.
People on expiring unemployment benefits are simply the latest victims being told to lower their expectations and expect crappy jobs, and employers are getting away with completely checking out of their responsibilities to workers who occasionally get sick, have children, and inevitably get old.
This is the new reality of work in a low wage, low tax, low skill, high profits economy, and Republicans are never going to do anything to change it because they (with the help of their Dem partners in high crime) created it, and frankly, they like it.

#2 Comment By icarusr On January 17, 2014 @ 12:40 pm

“Like it or not, the federal and state governments can target some of the root causes of poverty and economic hardship.”

Komenist anticolonial talk, if I ever heard one; right out of Alinskyite European textbooks. It can be proven by facts and figures that the average American unemployed person has never had it better, what with Obamacare and Obamaphones and the Food Stamp President, short of not driving a Cadillac, the unemployed have nothing to complain about. For example, there are areas in Idaho and Montana that are experiencing a labour shortage because of an energy boom – why don’t North Carolinans move there and, like, work, instead of wanting the Gubmint to give them a job, or worse, a handout? Where is the entrepreneurial spirit – why don’t they start businesses? Romney and Trump did well enough by strivin’; has Ryan ever relied on the Gubmint for a cent of his livin’?

The Conservative Minister of Industry in Canada said it best:

“Is it my job to feed my neighbour’s child? I don’t think so.”

[26]

Now, there’s “muscular, masculine”* conservatism for ya, not this namby pamby talk of “government” making jobs.

* [27]

#3 Comment By Screwtape On January 17, 2014 @ 1:46 pm

“With control of both houses in the General Assembly and the Governor’s Mansion, the GOP passed many far-reaching reforms…”

Do you have to call them “reforms”? That implies they are improvements. And they really aren’t. You should probably use a different word like “changes” or even the more accurate “demolishing”.

#4 Comment By William Dalton On January 17, 2014 @ 4:29 pm

The poll to which you link showing Kay Hagan leading Thom Tillis, the McCrory establishment candidate for the U.S. Senate, also shows that she is trailing Rand Paul endorsed Dr. Greg Brannon in the same polling. I would suggest that most North Carolinians believe that tax money being poured into “job creation” do less to create jobs than they do advance the careers of politicians, and that, overall, they are a drag on the economy and lead to more layoffs in the future.

Unemployment insurance is a program into which employers are obliged to pay the premiums and those premiums are calculated on the basis of benefits being paid in set amounts for a set period of time. The only legitimate way to increase benefits is to increase the burden of premium payments upon employers. Is that going to create more jobs? I don’t think so.

The best program government can adopt to promote job creation is that which seeks ways to make it less costly for business owners to employ more persons. This is what Republicans have sought to do in North Carolina. There is nothing to be gained by moving back in the opposite direction. And, frankly, if people in North Carolina can’t find employment in the period allotted to them to collect unemployment benefits there are other states to which they can move and collect such benefits longer.

#5 Comment By Jesse Ewiak On January 17, 2014 @ 5:59 pm

@icasur – If I didn’t know of your previous posts, I’d actually think you were serious. 🙂

#6 Comment By Fran Macadam On January 17, 2014 @ 6:31 pm

Quite frankly, we no longer live under a representative government.

#7 Comment By Puller58 On January 17, 2014 @ 6:49 pm

The GOP answers to the donor class. Now the base can be distracted by culture warfare, but if Obama is no longer in the White House, and the economic reforms consist of more overseas job shifting, importation of cheap foreign labor, and nods and winks at the southern border, then civic unrest might find the GOP struggling to cover itself.

#8 Comment By WorkingClass On January 17, 2014 @ 10:59 pm

The working class (people who work for a living) needs trade and immigration policies that balance the needs of business, labor and the economy. Not just the needs of plutocrats. We need labor law that levels the playing field for workers. We need single payer health care and an end to trillion dollar wars that accomplish nothing. We all need an end to the tyranny of Wall Street and the Fed and a return to sound money. Above all we need a restoration of our civil liberties and the rule of law. To accomplish these things we need representation in Washington.

The GOP could do a better job of pretending to represent the 99%. The Democrats are better pretenders. But neither party is working for us. Fran has it right.

#9 Comment By Victor On January 18, 2014 @ 12:09 am

The modern GOP does not care about 99% of Americans. Why pretend otherwise? This is not the party of Reagan, Nixon, Goldwater, or Ike. All sense of loyalty to the average American is gone. The party seems to want an America where Americans are ready to fight to the death over an apple to show how ruggedly individual the country is.

What kind of society other than dystopian do you think we’re becoming where people don’t care if they’re neighbor’s child is starving yet people laughingly call themselves Christians?

#10 Comment By Kevin Jenness On January 18, 2014 @ 3:58 am

Icarusr; Ryan went to college on Social Security survivor’s benefits. His family’s business thrived on government road contracts. He married money. He has spent nearly his entire career on the government payroll. Romney and Trump have strived similarly to reach home from third base. Stop kidding yourself.

#11 Comment By M_Young On January 18, 2014 @ 11:12 am

“But of course, those jobs are still being systematically dismantled, shipped overseas, or stripped of the benefits like health care and pensions that used to make them good jobs.”

Sure those things are happening, but North Carolina has had in the last decade, I believe, one of the highest rates of growth in Latino population. That indicates a lot of immigration. Those foreign workers are taking the jobs ‘Americans won’t do’ — more properly won’t do at the given rate of wages, benefits and working conditions.

Immigration restriction — including restriction of legal immigration — has to be part of the policy mix to help the working poor and what was formerly the working ‘middle class’.

#12 Comment By Johann On January 18, 2014 @ 12:21 pm

I noticed the article gives no solutions, just criticisms. Forget partisan politics. The solution is to increase production. That is not easy. Real solutions require a very long time frame. Its not something that can be solved by a quick fix. The root of the problem is that we have outsourced much of our lower and semi-skilled jobs, and yet the proportion of our population with low skills is increasing.

To reverse this trend, we have to become more competitive in manufacturing, and most importantly, greatly improve our education system. And we have to stop illegal immigration of low skilled workers and somehow humanely deport illegal immigrants already here.

Production must be increased to reverse the trend. Incredibly, many mainstream economists believe that creating new money to buy government debt so that the government can continue to spend in deficit, including unemployment support, will increase demand, which will then result in increased production. But guess what? All it does is create more debt in order to buy more imports.

#13 Comment By Brian J. On January 18, 2014 @ 2:27 pm

Your polling information is out of date, Mr. Dent. Tillis and all other GOP contenders now lead Hagan, after trailing since the first polls were done in 2012.

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Also, North Carolina’s outperformed most of the other states in GDP growth, while the drop in labor force participation and employment rate are the same as those seen nationwide. (LFP has fallen from 63.5 to 62.8% since June nationwide.)

Economic and political realities indicate that North Carolina will stay on the path that it’s on.

#14 Comment By isaacplautus On January 18, 2014 @ 3:11 pm

The shocking little secret is that Democrats like Jim Hunt were far closer to Burke and classical conservatism than the radicals who currently run Raleigh.

#15 Comment By icarusr On January 18, 2014 @ 9:32 pm

Kevin: Ryan and Trump were the giveaways that I had my tongue firmly in the cheek 😉 … I know about his background. And Trump and Romney were both born into privilege. But thanks for taking me serious, because almost nothing I wrote is original and almost all comes from one of the various conservative sites. 🙂 …

#16 Comment By Frank Stain On January 19, 2014 @ 8:48 am

M Young said ‘Immigration restriction — including restriction of legal immigration — has to be part of the policy mix to help the working poor and what was formerly the working ‘middle class’.’

Your focus on the effects of immigration on labor supply seems myopic. Immigration is far from the only thing that effects labor supply, and labor supply is not the only effect of immigration. Some other things that effect the supply of labor are
1) the change of welfare to ‘workfare’, adding hundreds of thousands to the low end job marker
2) the increasing labor market participation of women in recent decades as men’s wages have declined
3) the abortion rate
4) family policy. Mike Lee has proposed a family friendly tax cut. That will increase . . . labor supply.

On the other hand, a very good thing about immigration is that it shores up the future of our pay as you go social insurance systems which (as Mike Lee understands) depend on future taxpayers.

More generally, when you try to break the solidarity of workers through petty minded prejudice, you play right into the hands of our rapacious elite.

#17 Comment By Winston On January 19, 2014 @ 10:33 am

NC right tow work state already. Right to work laws depressed wages. NC due to get poorer. Note next comes army of aging who haven’t saved a dime!

[29] 2011-10-11/new-south-battles- old-poverty-as-right-to-work- promises-fade.html
New South Battles Old Poverty as Right-to-Work Promises Fade

And you get this:
[30]
UNC Officials Lash Out at Academic Fraud Whistleblower

[31]
University of North Carolina learning specialist receives death threats after her research finds one in 10 college athletes have reading age of a THIRD GRADER
Mary Willingham exposed college athletes’ lack of academic abilities
She found that 10 per cent read at elementary school level
A majority of players’ reading level was between 4th and 8th grade
Men’s basketball makes $16.9m-a-year for University of North Carolina

#18 Comment By Winston On January 19, 2014 @ 11:02 am

GOP doesn’t know how to improve economy. You build up people, not cut them down. As far as GOP is concerned they are a statistic, see only one side of budget -the costs and ignore the other-the revenues.

Meanwhile GOP wants to create more small local governments in state with already too many small local governments. Small equals weak and thus also help make NC poorer. Small= weak .

I think wrong emphasis on benefits. Those UNC students and their reading level indicates this state has no clue how to build capacity and thus improve revenues from better income earning capacity of its citizens!

#19 Comment By JonF On January 19, 2014 @ 12:34 pm

Re: The solution is to increase production. T

American productivity has been increasing by leaps and bounds. We do not have productivity crisis. We have a crisis due to the fact that too few people are reaping the benefits of that productivity increase.

#20 Comment By Douglas V. On January 20, 2014 @ 12:20 pm

How many months and weeks until unemployment benefits become simply a welfare payment?

#21 Comment By david gilmour On January 20, 2014 @ 5:35 pm

Puller 58 makes an interesting point re civil unrest. If the GOP wins the next election it will find itself in the position of having to address issues it simply blames on Obama currently.
Do a little thought experiment. GOP wins next election and puts into practice what it currently preaches economically and socially. How long before the social glue which makes a nation unsticks? And the consequences?

#22 Comment By cka2nd On January 20, 2014 @ 6:06 pm

Johann says: “To reverse this trend, we have to become more competitive in manufacturing, and most importantly, greatly improve our education system. And we have to stop illegal immigration of low skilled workers and somehow humanely deport illegal immigrants already here.”

Johann, “greatly improve our education system” how? I certainly hope you’re not proposing that we put everyone on a college-track like we’ve been trying to do for the last 40 years under both Democrats and Republicans.

Let’s see if we can cut a deal here, keeping in mind that most people from the Center to the Far Left do not want to close the borders or deport the illegal immigrants already here, and that libertarians will want no part of it.

– Protectionism. My fellow leftists oppose it, but to me this is a tactical question, not a matter of principle. Bring back the tariff and come down hard on outsourcing and offshoring.

– Raise the federal minimum wage to $15.

– Tax earnings from wealth (capital gains, dividents, stocks, etc.) at at least the rate of earnings from labor, and preferably higher.

– Tax financial transactions; personally, I’d say at the same rate as the local sales tax rate – none of this namby-pamby 1/10th of 1 percent BS for me – or at the federal level at a rate equal to the average state sales tax rate.

– Through the tax system, reward long-term capital investment and research and development, and punish, ruthlessly, short-term profit-taking and pure speculation.

– Education – Bring back vocational education in the public schools, including at the community college level. Train the next generation of mechanics, machine operators, tailors, plumbers and electricians. Oh, and restore the arts, foreign languages, after-school programs, athletics and anything else that will keep kids in school and engaged. And make calculus and computer coding electives, for heaven’s sake.

Immigration – Say no to guest worker programs and stand up to Microsoft, Apple and Co. so they have to hire programmers from America. Stop treating illegal immigrants as criminals, as counter-intuitive as that sounds, and instead treat them as workers, taxpayers (which most are), and contributors to the community.

Labor – Wages will not rise across the board without unions. Period. Encourage unionization in law, policy and fact. If their unions are not under constant assault, rank-and-file workers will also be more free to buck their leadership and fight for their livelihoods and those of the workers who will come after them, instead of giving in to the companies and their own despicable mis-leaders (see Boeing and the Machinists).

I though Mike Lee had some interesting ideas, and Lord knows I don’t expect conservatives to love the above or cut a deal without trying to get more of their own ideas represented. But there are some fundamental issues that find support across the political spectrum (a living wage, work is preferable to speculation, long-term investment over short-term profit-seeking, some degree of protectionism, dignity for all) that should serve as the basis for a number of bargains, some of them maybe even grand.

#23 Comment By M_Young On January 21, 2014 @ 3:24 am

Frank Stain

During the immigration restrictionist period of ‘the American Century’, i.e. the middle of the 20th century, we grew a large working middle class, had the baby boom, and put a man on the moon.

Since the resumption and acceleration of mass immigration, we have seen wages stagnate. That is no accident. Nor it is the fault of ‘workfare’ or even women entering the workforce, entirely.

As for immigration ‘propping up’ our retirement systems, that is merely kicking the can down the road to a place were we will be in a worse position, seeing as how immigrant themselves will retire, but given their skill and education profile, will not nearly match the earnings and thus contributions of ‘old stock’ Americans.

#24 Comment By Sean Gillhoolley On January 21, 2014 @ 10:10 am

The Republicans appear to support unlimited funding of the military and intelligence agencies, but refuse to adequetely fund national priorities like creating programs to ease poverty, education, police and other emergency personnel (less funding, and more of their existing funding being used to turn the police into a paramilitary force), maintaining infrastructure, and generally anything else that benefits all of society. It is as if they really dont want ANY benefits to trickle down to the least able amongst us. They come across as an uncaring, wicked party, intent on punishing the poor for being poor. It allows me to sleep at night, knowing that the chances of Republicans growing their level of control of government is negligible.

#25 Comment By Dakarian On January 21, 2014 @ 4:00 pm

@Douglas

Kind of hard given that the extensions aren’t actually extending people forever. I’m wondering if people are talking as if that’s what’s happening.

The extensions only have a set number of weeks which is about 1-2 years. Once past that point you are OFF of UI no matter what happens. Stopping the extensions means that you go from 1-2 years to about a month on average to find a job.

There’s been no suggestion to extend UI past that point and nothing has been done to do that.

Thus one way to consider the UI extension is this: how long are we thinking that it takes for a person to find another job? 1 month? 6 months? 2 years? Your answer should = the amount of extension you want to UI.

The point when we stop extension. Probably once we can expect a person to take less than a month to find a job again.

#26 Comment By Winston On January 21, 2014 @ 6:39 pm

I am saddened by what is transpiring in North Carolina. Other states I hope will follow its proactive local finance monitoring system. Until current generation f GOP in Govt. NC discouraged special district growth and increase in local governments. I am greatly saddened by how oblivious GOP in Raleigh is to how new policies actually weaken and harm the state further. This after all not a wealthy state. It has a population over a million more than New York City and yet a budget that is almost $50 billion less!

#27 Comment By Winston On January 21, 2014 @ 6:47 pm

I am beginning to think GOP in Raleigh is under impression governing in a richer state. Policies they have undermined/overturned demonstrated that the state understood that being poor meant managing money more carefully. What state saves from unemployment benefits it loses far more with anti-annexation bill. Saving pennies but wasting dollars-that’s the new GOP way in the state.

A poor state needs to build up its residents so they grow the revenue base. Not do the opposite. GOP has lost connection with reality.

#28 Comment By Chick Dante On January 23, 2014 @ 12:42 pm

Believing in the magic of low taxes, small government, deregulation and trickle-up economics, while supressing participation by the undeserving in the electoral process, is not much of a formula for electoral success. Rejecting the need for Unemployment benefits, formerly supported by the GOP and for years as a way to help all of us out of a nationa slump, is just a case in point (we have video).

The GOP once consisted of conservatives, and others, who actually thought that having a program to fix things would prove popular as long as it could be fixed somewhere in the reality based community. Now, it scorns that community every chance it gets. Shed of its conservative, moderate and liberal constraints, the GOP actually tells us that all it needs to be successfull is do a better job at selling the magic (like “9-9-9”) no matter how radical.

The holders of the magic beans and leading pitchment, are the four R’s of the GOP: Paul Ryan, Rand Paul, Rick Santorum and Ayn Rand. At the end of the day, no matter how well they hawk it, regressive policies and more laissez-faire economics are not what the public wants. And insulting the electorate for failing to believe in the magic is a sure loser at the polls.

#29 Comment By Rossbach On January 24, 2014 @ 4:33 pm

“Today there are approximately three unemployed workers for every available job opening”. It is really hard to see how giving out a million green cards a year is going to help our unemployment problem. Reducing legal immigration to traditional (pre-1970)levels and deporting the illegals would give our people a fighting chance to recover from the worst jobs depression in 75 years.