Posted: May 18, 2010
The Huffington Post

Yesterday the Coalition on Human Needs sent out an alert asking people to call their congressional representatives in support of a bill that will extend the federal Unemployment Insurance program, provide aid to states, and fund important jobs programs. Early this morning I received some emails in response. One pointed out that joblessness is so bad that some have already exhausted all their benefits. Another talked about children’s services being cut in her state. They are going to call Congress. I hope Congress listens.

Some Members of Congress are paying attention to other voices right now, particularly those who speak in well-packaged sound bites about the need to make cuts to shrink government costs. But they are forgetting that we cannot really recover while unemployment remains nearly 10 percent. The Center for Economic and Policy Research has estimated that such high levels of joblessness will result in one trillion dollars in lost wages – that means people cannot buy the items that keep our economy growing. They don’t pay much in taxes either. They claim unemployment benefits. Deficits grow.

Government can help get the economy moving again, or it can keep it hobbled. Around the nation, hundreds of thousands of teachers, firefighters, and police are threatened with lay-offs. Services that protect children from abuse and neglect are losing essential staff. Cost-effective child support collection efforts are being undermined by cutbacks. More needy families are straining state Medicaid budgets, forcing states to either reduce access to health care, cut everything else, or do some of both.

Last summer, federal funds put more than 300,000 low-income youth to work. Summer is coming very soon, and so far, Congress has not approved youth jobs funding.

No wonder the electorate is increasingly angry. They feel government spending is not helping them. But the answer is not for Congress to cut off the assistance communities urgently need. They still need to invest in programs and services that pay off.

Mark Zandi, economist at Moody’s Economy.Com, points out that every dollar spent on unemployment benefits creates $1.63 in economic activity. And every federal dollar paid towards state Medicaid costs results in $1.41 in economic growth. Ending such aid would slam the brakes on the economy, just when we are beginning to see some forward motion.

Later this week, the House of Representatives is expected to take up a bill that would extend unemployment benefits and heath care for the jobless through the end of the year; prevent emergency federal funding for Medicaid and Temporary Assistance for Needy Families (TANF) from expiring; and, we hope, include funds for summer jobs for youth.

The bill – the American Jobs, Closing Tax Loopholes and Preventing Outsourcing Act (H.R. 4213) – has other provisions as well. It continues a number of tax breaks for businesses and families that Congress generally extends annually. It is also likely to prevent reductions in reimbursements to physicians in the Medicare program.

In previous legislation, Congress had decided that the tax breaks should be paid for through revenue sources that would offset their costs. Congress determined that other provisions – such as Medicaid and Medicare funding and unemployment insurance – did not need to be paid for since they were implemented in response to the country’s economic emergency. With these provisions now gathered into one bill, some members of Congress are experiencing sticker shock. But the original deal made sense. If the House abandons it now, it will result in an abrupt end to still-needed federal aid to states. More than 20 states have assumed this extra federal Medicaid help will be available in crafting their own budgets – a reasonable assumption given that both the House and Senate have approved funding for this purpose at various points. If Congress pulls back now, state budget shortfalls will grow even worse.

That brings us back to the real world where more than six million people have been out of work for more than six months. One in four youth is unemployed. Hunger and poverty are growing. Instead of investing in education, communities are cutting back on everything from early childhood programs to college.

In the sound bite world, people holler about the deficit and out of control spending. Those shouting the loudest never want to invest in public services. They are playing on our fears. But they are the irresponsible ones. Shutting down funds for essential services will stall our economy now and hurt people in a way that will shrink our economic potential for years to come.

Through H.R. 4213, our representatives will get to choose between jobs and joblessness; between fueling economic growth or stalling it out. It won’t solve all our problems. But the funding in this legislation will boost the economy in important ways. House members should remember the real world, not the sound bites, and vote for it.

To make sure your voice is heard, call your representative and insist he or she casts a vote in favor of real people – not sound bites.

From ACORN, a Half in Ten partner—

Bertha Lewis
CEO and Chief Organizer, ACORN

Think the economic recovery package was all about contraceptives and a $4 billion payout to ACORN? (We wish.) Think again.

What conservative bullies like Rush Limbaugh and Sean Hannity are not telling us in their drearily familiar, windbag attacks on the desperately needed economic recovery package is that it contains a wealth of provisions that put money directly into the economy through programs aimed a low- and moderate-income families.

These types of programs are not only essential to the survival of working families facing hardship at every turn, but they put money into the hands of folks who will immediately spend it in the local economy on things like food, transit, clothes, and school supplies. In fact, Moody’s Economy.com chief economist Mark Zandi says that investing in the food stamp program (SNAP) will provide $1.73 in GDP growth for every $1 invested.

It is absurd that people like Limbaugh and Hannity are controlling the terms of debate for a package they will never support anyway. To fight back against the right-wing noise machine, ACORN members are taking time out of their day to call their Senators at 1-866-888-9292 and urge them to vote “YES” on the economic recovery package. Moreover, ACORN is highlighting some specific opportunities to strengthen the already numerous progressive provisions within the package. Two of the biggest priorities for our communities are:

• The House-passed version of the Child Tax Credit. Simply stated the House version puts an additional $3.9 billion into the hands of the households who will spend it right away to meet basic family needs, and thus spur economic activity. It helps a total of 12 million low-income children and helps 6.45 million more families than the Senate version. We are asking our members and others to insist that their Senators adopt the House version.

• The House-passed nutrition provisions. Adoption of these would increase the FY 2009 Supplemental Nutrition Assistance Program – food stamps – by 13.9 percent, increase food assistance for seniors and for kids in afterschool programs. Again, we are urging our members and others to insist that the Senate adopt these House provisions.

We, as progressives, have got to step it up the next few days and bring home a bold and progressive stimulus package that will help lead us to a stronger economy. ACORN has set up a toll-free hotline that people can use to contact their Senators, insist on the types of provisions like the two above, and fight back against Rush Limbaugh’s attempt to run the Senate. That number is 1-866-888-9292. We’ve also set up a page progressives can use to e-mail their Senators.

Please take a minute to help pass a bold and progressive package; let’s make sure that the spirit that swept Barack Obama to the Presidency prevails in the work being done to get this country back on its feet and back to work.

WASHINGTON – Chaun Frost ran up her credit cards when the U.S. economy was booming, and now the single mother is paying a heavy price.

To service her debt and buy food for her two children, she has taken a second job selling pizza on weekends and some week nights, supplementing the $2,200 a month she earns from her job coordinating volunteers at a children’s hospital.

“We have been hurt by the current state that the economy is in,” said Frost, 32. “I am part of the new working poor.”

About 37.3 million Americans were living in poverty in 2007, or about 12.5 percent of the population, according to the government, which defines poverty as an annual income of $21,203 or less for a family of four.

Figures due out in August will show that rose by about half a percentage point last year, analysts estimate, and more and more people like Frost will slip into poverty this year as the recession takes hold.

In many ways, Frost is typical of the many middle class people in the current recession who are falling into poverty.

Many of the decisions she made seemed smart at the time. Some of her many debts were accumulated as student loans. She also makes monthly payments for a big car whose value is now less than the amount she owes on it.

Repayments on the car and insurance bills are almost as much as the $850 rent for the modestly furnished two-bedroom apartment she shares with her 11-year-old son and a 9-year-old daughter in Washington.

In a move she knows could spell trouble for the future, she has slashed her retirement contributions to $5 per check from $100, partly in response to a drop in the stock market.

And, underneath it all is the economic downturn, which has exacerbated her problems and shattered her financial self-confidence.

“Had I known that things would turn out this bad, I would have done things differently,” Frost said.

Unemployment Fueling Poverty

The worst financial crisis since the Great Depression of the 1930s, ignited by the collapse of the U.S. housing market, has sent the U.S. economy into a downward spiral.

Government data shows the unemployment rate jumped to 7.2 percent in December, the highest in nearly 16 years, as companies cut jobs to cope with a shrinking economy.

“My guess is poverty is going to go up from around 12.5 percent now by about half percentage point to 13 percent,” said Rebecca Blank, a senior fellow at the Brookings Institution in Washington. “The main driving factor is rising unemployment.”

Among those out of work is Shirley, 55, who has been living off a $195 weekly unemployment check since September.

“I never remember things being this bad,” she said. She declined to give her last name because she is in a legal battle with a bank over disconnected electricity at the apartment building in Washington where she lives.

“This is the longest I have been unemployed,” she said.

With the economy not expected to recover before the second half of 2009 and the jobless rate forecast to top 9 percent by the end of the year, analysts said the number of people living in poverty is set to increase.

“How many more people fall into poverty as this recession continues depends on what policy choices are made,” said Lisa Donner, Executive Director of the Half in Ten Campaign, an organization focusing on poverty in the U.S. capital.

Moving Poverty Line

The Center on Budget and Policy Priorities, a private think tank, estimates that if unemployment reaches 9 percent, 7.5 to 10.3 million more people could fall below the federal poverty line.

The Congressional Budget Office has estimated that government spending on food stamps will rise to $50 billion this year from $39 billion in 2008, another sign that more Americans are struggling.

Around the country, charity groups have reported an increase in the number of people using their services.

“We have seen an increase of about 10 to 20 percent in people seeking help with groceries. They are from all racial groups, and about four fifths of them earn incomes below the federal poverty line,” said food coordinator Jenette Chance of Bread for the City in Washington.

Some experts criticize government poverty measures, arguing that the methodology was developed in the mid-1960s and has had no major revisions, except to make adjustments for inflation.

Instead, they propose a poverty measure that takes into account variables such as taxes paid and credits received, medical expenses and work-related expenses.

“The official measure very much understates the number of people or households having a very tough time,” said Ann Chih Lin a public policy and political science professor at the University of Michigan.

The collapse of the U.S. housing market means many middle class people are either living in poverty or are one pay check away from hard times, she said.

“Recessions normally hit the people who are the poorest harder, but this clearly is a middle class recession because of the credit and foreclosure crisis,” said Lin.

President-elect Barack Obama is pushing for the swift passage of a spending package to promote economic recovery.

For Frost, anything would be better than the status quo.

“I guess we all are looking for miracles and some good leadership for the good of the economy,” she said. “When you look at who is in the unemployment benefits line, the food line, it’s a lot of people who were middle class.”

(Reporting by Lucia Mutikani; Editing by Eddie Evans)

http://news.yahoo.com/s/nm/20090116/us_nm/us_usa_economy_poverty/print

A coalition of 36 major Christian organizations today urged President-Elect Barack Obama to put poor people first when designing an economic stimulus package.

Christian Churches Together, which says its represents 101 million church members, said talk of bailouts and stimulus packages have focused too much on the middle class instead of the poorest citizens.

“We really can’t be true to our calling and our Christ without addressing poverty,” said William J. Shaw, president of the National Baptist Convention, USA and president of the African American groups in Christian Churches Together.

Christian leaders said they met with Obama’s transition team to discuss the main priority of many religious groups: reducing poverty.

They asked the new administration to set a goal to reduce poverty by 50 percent in the next decade. That same goal was suggested to President Bush eight years ago, but it wasn’t met, said the Rev. Wesley Granberg-Michaelson, general secretary of the Reformed Church of America.

“Poverty is a moral failure,” he said. “The ongoing scandal of poverty in our country is not just a political issue but is a moral and spiritual issue.”

The group acknowledged that middle class families need help, too, but said those in poverty have the most pressing need. Helping the poorest families could stimulate the economy, they said.

The responsibility to help, they said, lies with the government and with religious organizations.

Christian Churches Together, formed in 2006, includes members from every major denomination. It is broken into five “families” — Catholic, Orthodox, historical Protestant, Evangelical/Protestant and African American.

President-elect Barack Obama’s pick for secretary of agriculture says that if he is confirmed he will work to boost the economies of farm communities, promote nutritious foods and help poor families put meals on the table.

The man Obama wants running the Agriculture Department, former Iowa Gov. Tom Vilsack, is scheduled to appear Wednesday for a Senate confirmation hearing.

In testimony prepared for the hearing, Vilsack says the Agriculture Department faces “historic challenges,” mostly brought on by economic woes.

If confirmed, Vilsack will oversee the nation’s nutrition programs, including food stamps, a large part of the department’s budget. Nutrition programs are facing increased need in recent months as the economy has stumbled.

A struggling Northern Nevada could benefit from President-elect Barack Obama’s proposed economic recovery plan, which would create jobs and provide federal aid, according to proponents who urged legislators Thursday to support it.

Former Democratic congressional candidate Jill Derby headlined a local panel of supporters as part of a simultaneous 40-city event organized nationwide by advocacy group Americans United for Change to promote the plan. Reno and Las Vegas were chosen to take part in the event because of Nevada’s designation as a battleground state in the past two presidential elections.

Participants in the Reno event specifically called on U.S. Rep. Dean Heller, R-Carson City, to support the plan. Heller was not immediately available for comment, according to a representative reached by phone. Heller, however, strongly has opposed bailouts for financial institutions and the auto industry, but indicated in a statement released earlier this month that he prefers economic reforms that generate jobs.

Obama’s plan, estimated to cost between $600 billion to $1 trillion, primarily relies on significant investments in U.S. national infrastructure, transportation, telecommunications and energy efficiency. But supporters said Northern Nevada also could directly benefit from the plan through increased federal aid. The money could be used to fund law enforcement, education, health care for children and low-income families and other services, proponents said.

“This economic crisis is the most pressing issue facing the country,” Derby said. “And anybody who’s been paying attention knows that Nevada has been one of the hardest hit areas during this economic downturn. Part of the plan is to provide aid to state and local governments, and Nevada needs it. The state can’t withstand further cuts (to its programs).”

The economic recovery plan also should produce more tangible results for ordinary Americans than the recent bailouts given to financial institutions, said Robert Townsend, a former Democratic candidate for Assembly District 25 and a supporter of the plan. By investing in highways, construction and telecommunications across the country, for example, the plan will directly benefit people by creating at least 2.5 million jobs.

“(The economy) is an awfully big boat to turn around … and we have to drive it from the bottom up to get it moving,” Townsend said. “That means investing in projects that will create jobs and wages for actual human beings. I mean, look at the bailout money given to AIG. We don’t even know what they did with it.”

Some analysts have said the Obama recovery plan is not a silver bullet, citing the Great Depression-era plans by President Franklin D. Roosevelt as an example.

“Government spending alleviated pain of (the) patient, but did not cure the patient,” Amity Shlaes, senior fellow on the Council of Foreign Relations and author of the Forgotten Man, told Foxnews.com recently.

“It’s a mistake to confuse infrastructure spending with the cure; the private sector is the engine of true recovery,” she said, adding that building the economy through the public sector can lead to a “less good and less enduring recovery.”

Supporters of the plan, however, said they hope to build consensus among members of the Senate and the House early enough so legislation will be in place and ready to be signed by the time Obama assumes office. But doing so will require cooperation from both sides of the aisle, said Mike Galeoto, a consultant who put together the local event.

“This is really all about getting Democrats and Republicans to come together and work on a solution instead of having all this partisan bickering,” Galeoto said.

http://www.rgj.com/article/20081219/NEWS04/812190486/1321/NEWS

Eleven months ago, Pat King was a successful loan officer making about $10,000 a month. Today, the economic crisis has left the unemployed single mother living on pennies to raise her 17-year-old son in West Oakland.

“I saw it coming,” said King, 45. “Loans were flying out the air, and people could put anything on paper. Then slowly loans that I was trying to get approved started to be more difficult, and the industry began to put in more restrictions.”

King is among scores of Oakland residents who are struggling, out of work or in serious financial trouble. She said she is “just hanging on day by day” and not living out the American dream.

Through the CalWorks program, King receives temporary financial assistance and employment-focused services based on state guidelines for her income, property and family size.

So far this year, nearly 2 million Americans have lost their jobs. Unemployment is at 7.1 percent in Alameda County and 8 percent statewide.

In the shadow of the worst economic crisis since the Great Depression, city officials and community leaders have banded together. They say it will take a strong local effort to support President-elect Barack Obama’s plan for a major economic recovery and jobs-creation package.

“We need a game-changing strategy,” Oakland Mayor Ron Dellums said Thursday at City Hall. He was joined by Councilmember Desley Brooks (Eastmont-Seminary), Councilmember-elect Rebecca Kaplan, the Urban Strategies Council and ACORN, the Association of Community Organizations for Reform Now.

They gathered as a part of a national coalition to launch the “Jobs and Economic Recovery Now!” campaign. The economic recovery plan is the largest U.S. public works program since the interstate highway system and includes projects to repair bridges, roads, as well as create green-collar jobs to reduce energy and global warming emissions.

“The Green Jobs Core was pioneered in Oakland to fight poverty and pollution,” Dellums said. “We can help lead the country in a new direction and open up a level of employment that’s extraordinary.”

The group agreed that saving the economy and the environment are equally important and urged residents to create the “change they want to see locally.”

Dellums, who was appointed Thursday to serve on the United States Conference of Mayors’ Working Group on the MainStreet Economic Recovery Plan, said the panel will be meeting with Obama’s economic team to discuss how to rebuild the nation’s crumbling infrastructure.

In addition, grass-roots groups, including the Alameda County Community Asset Network, are working in conjunction with “Bank on California,” a new initiative by Gov. Arnold Schwarzenegger and former President Bill Clinton to help low-income families build savings.

The goal is to help the “unbanked,” many of whom are poor or immigrants, gain access to banking services including prepaid debit cards, penalty-free fee accounts, credit repair services and financial coaching and counseling.

According to the Brookings Institution, 11 percent of California’s 25 million residents do not have checking or savings accounts. About 21 percent of African-American households and 24 percent of Latino households do not have a bank account. The goal of the program is to create 100,000 accounts in two years among residents in San Francisco, Oakland, Los Angeles and Fresno.

John Brauer is a founding member of the asset network and executive director of the Workforce Collaborative. The Oakland-based nonprofit provides job readiness and placement services to people with little work history or who face barriers to employment, including homelessness or records of incarceration.

“In this economy, the folks we serve are the last hired and the first fired,” Brauer said. “I think people now more so than ever are looking for training as a necessity to compete better.”

Community and city leaders say addressing the economic recession and neighborhoods impacted by the foreclosure crisis will take a multilayered strategy. ACORN has teamed with the Urban Strategies Council, a nonprofit community building and advocacy agency, to restore blighted neighborhoods and redevelop vacant residential properties.

Through a community land trust, they plan to purchase and rehabilitate 200 bank-owned properties in Oakland and sell the houses — but not the land — at low-interest loans to residents. By maintaining ownership of the land, the land trust could keep the prices of the homes affordable and gain income as a trust from the appreciation of the land.

Andy Nelsen, director of Economic Opportunity Programs at the Urban Strategies Council, said the public-private partnership will help create so-called “green-collar” construction jobs and neighborhood stability and stimulate the local economy.

“Banks and lenders have left us with a real mess to be cleaned up in urban areas,” he said. “But a stimulus package gives us a chance to turn this into a real opportunity.”

http://www.insidebayarea.com/oaklandtribune/localnews/ci_11266632

ST. PAUL – With large corporations and small businesses slashing jobs at record rates, the country can’t afford to wait for an economic recovery plan, a coalition of Minnesota organizations said Thursday. The group announced a “Jobs and Economic Recovery Now!” campaign to have a plan on President Barack Obama’s desk soon after he takes office.

“Following eight years of misguided economic policies that gave priority to tax breaks for multimillionaires and big corporations, the Obama plan will get America’s disappearing middle class working again right away and make smart, long-term investments that will keep them working long after,” said Denise Cardinal, executive director of the Allance for a Better Minnesota.

More than 10,000 Minnesotans lost their jobs in November, boosting the state’s umemployment rate to 6.4 percent, according to figures released Thursday by the Minnesota Department of Employment and Economic Development.

State Economist Tom Stinson has predicted that Minnesota could lose as many as 50,000 jobs over the next year as the recession deepens. This would bring the level of unemployment to the highest level during the entire 30-year period for which data is available, according to policy analyst Jeff Van Wychen of Minnesota 2020.

Obama’s plan, outlined in a radio address Dec. 6, includes the single largest investment in U.S. national infrastructure since the creation of the federal highway system in the 1950s, as well as massive investments towards making public buildings more energy-efficient, upgrading and modernizing school buildings, and modernizing the U.S. health care system. The plan also is likely to include increased federal aid to states and local communities to fund law enforcement, education, health care for children and low-income families, and other services.

The “Jobs and Economic Recovery Now” campaign will employ all of the tools of a traditional campaign, including a massive grassroots movement and paid advertising, to pass the economic recovery package by strong bipartisan margins in the House and Senate in January – then send it to Obama immediately after his inauguration, the group said.

The campaign’s coalition includes Minnesota ACORN, AFSCME Council 5, Alliance for a Better Minnesota, Americans United for Change, Jewish Community Action, JOBS NOW Coalition, UFCW Local 789 and U.S. Action.

“When workers lose their homes, their jobs and their health care, the need for government help soars,” said Jerry Serfling of AFSCME Council 5. “To help struggling families survive this recession, we need to invest in health care, food stamps and unemployment assistance. President-Elect Obama knows what Franklin Delano Roosevelt knew. Good jobs create an economy that works. To stave off another depression, Minnesota needs public investment to create good jobs.”

http://www.workdayminnesota.org/index.php?news_6_3884

With the economy deteriorating rapidly, the nation’s employers shed 533,000 jobs in November, the 11th consecutive monthly decline, the government reported Friday morning, and the unemployment rate rose to 6.7 percent.

The decline, the largest one-month loss since December 1974, was fresh evidence that the economic contraction accelerated in November, promising to make the current recession, already 12 months old, the longest since the Great Depression. The previous record was 16 months, in the severe recessions of the mid-1970s and early 1980s.

“We have recorded the largest decline in consumer confidence in our history,” said Richard T. Curtin, director of the Reuters/University of Michigan Survey of Consumers, which started its polling in the 1950s. “It is being driven down by a host of factors: falling home and stock prices, fewer work hours, smaller bonuses, less overtime and disappearing jobs.”

The jobless rate was up from 6.5 percent in October. The job losses far exceeded the 350,000 figure that was the consensus expectation of economists.

Over all, the job losses since January now total more than 1.9 million, with most coming in the last three months as consumers and businesses cut back sharply in response to the worsening credit crisis.

The report on Friday by the Bureau of Labor Statistics included sharp upward revisions in job-loss figures for October (to 320,000 from the previously reported 240,000) and for September (to 403,000 from 284,000).

The employment report increased the likelihood that Congress, with the support of President-elect Barack Obama, will enact a stimulus package by late January that could exceed $500 billion over two years. More than half that money would probably be channeled into public infrastructure spending. Many economists consider such investments an effective way to counteract, through federally financed employment, the layoffs and hiring freezes spreading through the private sector.

“Basically $100 billion of public investment in such things as roads, bridges and levees would generate two million jobs,” Robert N. Pollin, an economist at the University of Massachusetts, said. “That would offset the two million jobs that we are now on track to lose by early next year.”

The manufacturing sector has been particularly hard hit, losing more than half a million jobs this year. That is nearly half the 1.2 million jobs lost since employment peaked in December and, in January, began its uninterrupted decline. The cutbacks seem likely to accelerate as the three Detroit automakers close more factories and shrink payrolls even more as they try to qualify for the federal loans they asked Congress this week to approve.

While manufacturing has led the way, the job cuts are rising in nearly every sector of the economy. “My sense is there is just a collapse in demand,” said Marc Levinson, research director for the union Unite Here, whose 450,000 members are spread across apparel manufacturing, hotels, casinos, industrial laundries, airport concessions and restaurants. “Our members are being laid off big time,” Mr. Levinson said.

The latest jobs report came during a week of compelling evidence that the American economy is falling precipitously. On Monday, the National Bureau of Economic Research ruled that a recession — the 12th since the Depression — had begun last December, even earlier than many people had thought.

That news was followed by fresh reports of cutbacks or declines in construction spending, home sales, consumer spending, business investment and exports. And companies in every industry sector announced layoffs this week, including AT&T, the telecommunications company, with 12,000 job cuts; DuPont, the chemical company, 2,500; and Viacom, the media company, 850.

Even retail sales in the Christmas season were off sharply. The International Council of Shopping Centers on Thursday described November sales at stores open at least a year as the weakest in more than 30 years.

With all this in mind, and particularly the shrinking employment rolls, economists are estimating that the gross domestic product is contracting at an annual rate of 4 percent or more in the fourth quarter, after a decline of 0.3 percent in the third quarter.

“Our G.D.P. forecast for 2009 is now minus 1.8 percent, rather than minus 1 percent,” HIS Global Insight, a forecasting and data gathering service, informed its clients in an e-mail message this week, explaining that all the latest bad news left it no choice but to issue a sharp downward revision.

“We see the unemployment rate at 8.6 percent by the end of 2009,” Global Insight said.

An editorial from the Minneapolis Star-Tribune

The recent release of state and U.S. unemployment rates is just the latest indication that the global economic crisis is quickly becoming an employment crisis as well.

Nationally, new claims for unemployment benefits last week spiked to a 16-year high of 542,000, which brings the four-week average to 506,500. Those are the worst numbers in 25 years, and it’s likely November’s unemployment rate will go even higher than October’s 6.5 percent.

Minnesota’s figures also reveal troublesome trends. Another 7,500 jobs were cut in October, which pushed the unemployment rate up to 6 percent statewide. Hit hardest over the last year were jobs in construction, which has contracted along with the mortgage meltdown. Overall, 6,700 construction jobs, or 5.2 percent of total state construction employment, have been lost. Few of these jobs are likely to return until the housing crisis, which is the root cause of the financial crisis, is addressed with more vigorous public policy.

Most economists believe the jobs outlook won’t brighten until the economy begins to turn around, which could be well into next year, or even not until 2010. Headlines like Citigroup’s plan to lay off more than 50,000 workers will only add to the total. And in the process, decreased consumer confidence will only exacerbate the economic downturn.

While there is little that national officeholders can do to immediately get people back to work, our representatives in Washington can take steps to cushion the unemployment blow.

A first key move happened this week when President Bush signed a bill to extend unemployment benefits another seven weeks. This is on top of the standard 26 weeks and 13-week extension that had already been approved this year.

The Senate should take another important step and pass the House’s version of the Unemployment Insurance Modernization Act. If enacted, it would give incentives to states to more closely align unemployment insurance eligibility rules. Nationally, according to U.S. Department of Labor statistics, only 37 percent of workers who are unemployed receive benefits. Many of those falling between the eligibility cracks are low-wage workers who may be on the precipice of poverty.

Wide disparities exist between states that have and those that haven’t adopted the “alternative base period” (ABP) standards that are required to receive the federal funds. In Minnesota, which has enacted a portion of the ABP, an estimated 39 percent of those unemployed receive benefits, while just over the border in Wisconsin, which has full compliance, 53 percent do. In South Dakota, which has not adopted an ABP, there is only an 18 percent recipient rate.

Minnesota officials, aware of the bill’s benefits, are well positioned to move on any further requirements. If Congress passes the act and the state is in full compliance, Minnesota stands to receive up to $141 million in incentive funds, as well as $9.9 million for administrative costs.

Passing the Unemployment Insurance Modernization Act would help the unemployed and the economy. It should be among the first bills awaiting President Obama on Jan. 20, 2009, if it doesn’t get to President Bush sooner.