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Billions to Bankers, Nothing to the Unemployed

By Adam Price

San Jose, CA – On Friday, Oct. 3, the House of Representatives voted to approve Secretary of Treasury Henry Paulson’s $700 billion bailout plan and then left town to campaign for the election. Despite government reports showing that almost half a million people applied for unemployment insurance benefits in one week alone in September and that the economy had lost 159,000 jobs, Congress did not extend unemployment insurance benefits for the long-term unemployed. This inaction will cause almost 800,000 jobless workers to lose their benefits this month.

While the official unemployment rate in September was reported to be the same as in August (6.1%), this was only because hundreds of thousands of people gave up looking for jobs while others had their hours cut, but were not laid off. If these so-called ‘discouraged workers’ and those working part-time because of poor economic conditions are included, the unemployment rate would be 11%.

Friday’s report on the labor market also showed that workers were out of work for longer periods of time, as the average length of unemployment rose by a week to more than 18 weeks. A fifth of all officially unemployed, or almost 2 million people, have been out of work for more than six months. It is no wonder that the number of people receiving unemployment insurance benefits is now over 3.5 million, up almost 50% from over a year ago. Still this is barely one-third of all unemployed, in part because many have run out of their benefits.

African Americans were again the hardest hit, as their official unemployment rate rose by almost a full percentage point in September, to 11.4%. If those who dropped out of the official labor force were counted as unemployed, the unemployment rate for Black workers would have been almost 13% in September.

To add insult to injury, the bailout bill was loaded with tax breaks for businesses, including one for makers of wooden arrows. There was relief from the Alternative Minimum Tax (AMT), where the biggest benefit goes to households earning $200,000 to $500,000. There was an expansion of federal deposit insurance from $100,000 to $250,000. This list could go on and on, but the bottom line is that there was nothing for the unemployed.

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