The Wall Street Crash comes full cycle for the long-term unemployed

( – promoted by buhdydharma )

  The new weekly unemployment numbers came out Thursday, and on the surface they didn’t look bad. Initial claims, continuing claims, and extended benefits were all down.

 It looks like a win-win…until you start thinking about it.

  The number to pay attention to is at the very bottom of the report, EUC 2008 (Emergency Unemployment Compensation). To the long-term unemployed this is known as “the Tiers”.

 The number of people collecting EUC dropped 256,536 in the most recent report. Since the August 14 report 861,908 people have stopped collecting EUC. Another 21,628 people dropped off of extended benefits during the same period.

 That’s good, right? Only if you assume that nearly a million long-term unemployed people have gotten jobs during the past month at a time when the overall employment numbers have been shrinking for months and the number of people not in the labor force has been rising.

 Around 45% of all unemployed people are long-term unemployed.

 All you have to do is look at the unemployment chart at the top to realize what is going on.

 What happened 99 weeks ago from August 14th? Lehman Brothers went under, the economy froze up, and hundreds of thousands of people got laid off. This is simply the end game of what started in the fall of 2008.

 While logical, that isn’t proof in and of itself.

To really see more tangible numbers you need to look at these two charts:

Percentage of eligible now collecting unemployment benefits

Eligible unemployment insurance pool

  There are now 6,927,372 fewer people eligible to collect unemployment benefits. That doesn’t necessarily mean there are 7 million 99ers out there, but it does put some hard numbers toward an already logical conclusion.

  You might remember that layoffs continued to spike higher into early 2009. Thus we can expect the number of 99ers to increase dramatically in the coming months. This will be spun into something positive.

 people don’t count as “unemployed” in the claims data if they either give up or exhaust their extended benefits.

  The latter is a very real problem as the “leading edge” of the unemployed are now rolling off those EUC programs each and every week, and this distorts the figures severely. Yes, this will drive some of them to seek work (gee, no more government cheese?) but not all will succeed, and those that don’t now have no income from the government cheese or a job. This impact began roughly in June of this year and is now in “full roar”, with the maximum roll-off coming sometime in the middle of 2011.

  Yet the paradox is that the official “reports” do and will continue to show this development as economic improvement.

Like hell it is.

There are up to five million 99ers out there right now. How many more long-term unemployed will become 99ers in the coming months is an open question. One report from Pennsylvania is that the number will nearly double by April.

  People getting laid off from the Census Bureau and other short-term jobs will not necessarily show up in these unemployment numbers.

 The other problem with these numbers is that in order to file for jobless benefits you must have had a job for a continual (and substantial) period of time – typically four quarters (one year) prior to being laid off. Therefore, “re-layoffs” don’t count, and those who were marginally attached and then lose their job anew also don’t count. They count in the real economy though. Further, if you lose your job, file, find a new job, and lose that one you don’t count as a new claim – even though you’re (again) unemployed.

Black Wednesday

 Congress finally made an attempt at establishing a Tier V and pass a modest jobs bill on Wednesday. Republicans blocked it. Democrats didn’t exactly fight hard for it.

 This is a bad sign for what is coming. Funding for the current four Tiers is set to expire in eight weeks. Given that we’ve hit election season, we shouldn’t expect much action on this front between now and mid-November. It isn’t even on the radar of the news media right now.

  If Republicans win big in November then the chances of adding a few more months to the first four Tiers is slim.

 By Christmas time all of the long-term unemployed might be 99ers. Millions of households will be without any income at all, while we look at a Congress set to blame the troubles of the unemployed and desperate on the victims.

 If the election goes as predicted, 2011 could be a very dark year.