Troubling surge in long-term unemployed

Nydia Montanez is waiting impatiently for Congress to get back to work on Jan. 7.

The video producer has been hunting for a full-time job since she was laid off last April. She's had no success. And because Congress adjourned without extending unemployment benefits last November, hers have run out along with most of her savings. She's given up her apartment, and now lives with an aunt.

"This is a scary thing," she says. "I've never been laid off before in the 22 years that I've been working."

Ms. Montanez is one of almost 2 million Americans out of work - and out of unemployment benefits. They're the casualties of this recession which, while mild by some measures, has taken a toll on American employees, from Silicon Valley's high-tech wizards to service workers at the out-of-business Calvin Klein Outlet in Clinton, Conn.

President Bush says he'll unveil his proposal in an economic-stimulus package tomorrow, and House Democrats are set to disclose their own plan today, before Congress reconvenes. Since both parties contend that extending unemployment benefits is a priority, jobless workers are expecting lawmakers to act quickly.

But they could be disappointed. Deep divisions remain between the Senate, which voted unanimously for a comprehensive extension, and House Republicans, who favor a more limited plan. As a result, many observers believe those unemployment checks could get stalled yet again in political wrangling.

"Come January 7, all eyes will be on Congress to see if they can get this done," says Maurice Emsellem of the National Employment Law Project. "But so far, there's been no indication on the part of the [Republican] House leadership of any movement, and that's going to present a real problem."

At the heart of the debate is a fundamental difference in the perception of just how deep this economic downturn has gone.

House Republicans point out that the current unemployment rate of 6 percent is far below the peak of 7.8 percent reached during the 1992 recession - and doesn't come close to the 10.8 percent at the height of the 1983 downturn.

But Democrats and Senate Republicans counter that there are even more long-term unemployed - people who've been out of work for more than six months - than there were in 1991, at the same point in that downturn. Then, Congress extended unemployment benefits for two and a half years - until the number of long-term unemployed started going down. Now, the ranks of long-term unemployed are growing.

The proposal favored by Democrats would give an additional 26 weeks of unemployment benefits across the board and offer seven more weeks in states with extremely high unemployment rates. The plan favored by the Republican House leadership would offer an additional 13 weeks, but only to states with high unemployment. Rep. Phil English (R) Pennsylvania has offered a compromise providing an additional 19 weeks to all states, with another 13 weeks available in high-unemployment areas.

The fate of those bills could hinge to some extent on the new unemployment-rate data to be released this Friday. If the rate goes up again, the House leadership is expected to be more willing to compromise.

Whatever happens, Ms. Montanez is hoping Congress can put partisanship aside and make a quick decision.

She's continued to job hunt in her own field. And she's even applied for work in other areas, including as a buyer for manufacturing companies - the job she held before moving into video. After her benefits ran out, she did find a job working 16 hours a week at Macy's for the holidays. But she was laid off before Christmas because sales were so slow.

"It just seems like there are no jobs out there," she says.

Since January of 2001, the economy has lost more than a million and a half jobs. And the number of long-term unemployed has continued to grow. An additional 95,000 people are expected to exhaust their unemployment benefits each week. While the economy has begun to grow again, it's been sluggish.

"Growth hasn't been strong enough to make a dent in unemployment this year," says Harry Holzer, a professor of public policy at the Georgetown Public Policy Institute in Washington.

Some analysts contend that the unemployment rate of 6 percent masks the severity of the situation. When this recession started, unemployment hovered around 4 percent, so it's gone up about two percentage points in as many years. When the downturn started in the early 1990s, unemployment was at 5.8 percent. It peaked at 7.8 percent - also a two-percentage-point increase.

"I think you have to measure the severity of a recession not by the level of unemployment, but by the level of increase," says Wendell Primus of the Center on Budget and Policy Priorities in Washington. "If you measure this recession by the change in unemployment, it's been as great as in the early 1990s, and if you measure the long-term unemployed, it's been even worse."

Montanez is continuing to hunt for a job and she trusts she'll eventually find one. But in the meantime, she's gotten a patent for a new baby product and is looking for investors.

"I'm eager to go to work, any way I can," she says.