Holidays And Political Gridlock Strain Unemployed

The extension on federal jobless benefits is set to expire. If no deal is reached, 2 million people will see their benefits dry up by the end of January. Guest host Allison Keyes speaks with NPR Senior Business Editor Marilyn Geewax and Vincent Brandon, who has been unemployed since March.

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ALLISON KEYES, HOST:

I'm Allison Keyes and this is TELL ME MORE from NPR News. Michel Martin is away. Coming up we'll visit the Beauty Shop where the ladies are talking about everything from politics to divorce but first today there's some good news on the jobs front in America. New weekly unemployment claims dropped last week to their lowest level since April of 2008. Still, many families are anxious as debate continues in Washington over whether to extend jobless benefits for the long term unemployed.

If Congress doesn't act nearly two million people will see their unemployment checks dry up by the end of January. We wanted to talk about the challenges of not having a job during the holiday season. So, we're joined now by Marilyn Geewax, NPR's business editor. Also back with us is Vincent Brandon who was laid off in March from his job as a bus driver. Welcome and thanks for joining us.

MARILYN GEEWAX, BYLINE: Hi Allison.

VINCENT BRANDON: Thank you Allison.

KEYES: Vincent, I've got to ask, have you been following the debate in D.C. over the benefits and what do you think?

BRANDON: I have been following the debate. I've been following closely and just heard yesterday that the one of the proposals that was put on the table was turned down. So, I'm hoping that our Senators and our Congress are going to hang in there and continue to work and continue to, you know, iron this issue out.

KEYES: Are you angry or more disappointed in them?

BRANDON: I mean, I'm just really disappointed right now and, you know, you have the expectation that, you know, you work hard. I served in the military, you know, I served my country. I've been working hard. I've been a taxpayer for most of my adult life. I've been working since I was 12 years old so, I mean, I've been paying taxes and I expect my representatives to protect me essentially. Protect me from some of the downfalls that we're experiencing right now.

KEYES: Marilyn, I've got to ask, if Congress doesn't approve this extension, who is this going to hurt the most?

GEEWAX: Well, to understand that first let me just explain a little bit about how the program works. Traditionally, states administer unemployment benefits and typically they would go for 26 weeks, about a half a year. Well, in 2008 when it was apparent that the economy was really bad, Congress decided to give states extra money so, it could extend those benefits to 99 weeks in many cases and what we're debating right now, Congress is looking at whether or not to continue to send that federal money to the states to extend those benefits.

So, the people who would be affected are those who have been unemployed for 26 weeks or more and have been getting these additional federal benefits. Now, if that is not approved by December 31, people who are - have been unemployed more than six months will start to see their benefits fall away, and that will affect almost two million people right in January. So, there are folks right now who are getting about $300 a week in unemployment benefits - that's the typical amount - and they won't know if next month they're going to be able to pay the rent because right now it's very uncertain whether or not they'll be able to get those benefits.

So, the people who will be affected first and most are those who have been unemployed the longest, and as this goes on though, states - it varies. Some states give you a little more than 26 weeks, it depends. But if this really doesn't pass in Congress and it goes on all year, as many as five, six million people maybe affected.

KEYES: Wow, suddenly no money at all and you don't know what's going to happen. Vincent, you had a job this time last year. How is Christmas feeling different to you this year?

BRANDON: I mean, it's definitely stressful. It's, you know, you're not able to do all those things for your family that you were able to do, you know, I was able to do when I had a job last year. But I've been blessed, I mean, in my last job I was a member of the union and actually my union brothers and sisters all kind of pitched in and made sure that the unemployed workers had Christmas for their children. So, they did a toy drive and, you know, that helped out and in addition to my church those things help out a lot. But, I mean, it's still none the less stressful.

KEYES: You have a five-year-old daughter. I wondered how much she understands about what's going on.

BRANDON: Well, my daughter, you know, she really doesn't understand. She's not aware, you know, she keeps on saying Daddy's a photographer now. She sees me working with my camera a lot and I am doing more jobs with my camera. So, she thinks that's my job now.

KEYES: Okay, Marilyn, you - we've talked before about the impact of unemployment on consumer confidence whether people are spending money. How does that play out during the holiday season?

GEEWAX: Well Allison, we just got some new data this morning about that. The University of Michigan tracks consumer confidence and its gage shows that actually we've become a little bit more confident, primarily because gasoline prices have fallen. So, we're back up to a six month high going into the holidays and that's good for retailers. When people feel a little bit more confident, they spend a little more. But it's fragile. We're still well below where consumer confidence was back in say 2006, 2007 and the thing is we've got all of this uncertainty because of Congress.

Not only is there uncertainty about the unemployment benefits being extended but there's also the issue of the payroll tax cut. Congress has been deciding whether or not to extend this pay roll tax cut into 2012 - the decision hasn't been made yet - and as of December 31 that will expire. The existing tax holiday will go away. For the typical person, this amounts to about $20 a week in your take-home pay. So, if all of a sudden in January people are getting $20 a week less than they had and you lose those unemployment benefits that could all combine to have an impact on consumer confidence. So it's certainly something to watch going into 2012.

KEYES: If you're just joining us you're listening to TELL ME MORE from NPR News. I'm Allison Keyes and we're talking about unemployment during the holidays, the uncertainty around jobless benefits in Washington. I'm joined by Marilyn Geewax, NPR senior business editor, and Vincent Brandon, who's been unemployed since March of this year. Vincent, this is kind of a tough question, but I wonder, besides your benefits, have you been looking for other jobs?

BRANDON: I certainly have. Actually, I just attended a interview yesterday and I'm very hopeful. I'm looking for a nonprofit - work in a nonprofit field, specifically with youth advocacy. So, I'm hoping that something will come available. There are not many opportunities right now since it is the winter season. So, more opportunities are - come available during the summers for youth advocacy and youth counseling, things of that nature.

KEYES: I understand that some of the job openings these days have a caveat that says the unemployed need not apply. That's got to be a little discouraging.

BRANDON: Well, I mean, it is discouraging but, you know, I haven't really necessarily experienced that or at least they're not saying that to me directly.

KEYES: Right.

BRANDON: What I am experiencing are opportunities that have salaries and benefits, you know, that don't amount to gainful employment, you know...

KEYES: In another words not a wage that you can live on.

BRANDON: Exactly, exactly. I mean, if you have children, if you have a home, if you have car payment and, you know, your other additional bills, I mean, you still have to pay those bills. You would hope that you could find a job that would at least meet your bills, you know, be able to pay your bills.

KEYES: Vincent, I know that you're still getting benefits for about four more months or so, but I think you can't reapply if the extension doesn't pass. What are you going to do if that happens?

BRANDON: I quite frankly don't know exactly what I'm going to do. I'm trying to come up with a game plan right now on exactly what I will do. Chances are I will have to make some arrangements maybe to move in with family members or I would prefer not to move out of Pittsburgh because my daughter is here and my daughter is, you know, comfortable in her school. So, but that is an option that I would have to look at, is to move back to Baltimore where my family support group is at.

KEYES: Marilyn, the fact that people who could possibly lose their unemployment benefits - what if the benefits don't get extended into the middle of the holiday retail season? I mean, there are all those big shopping events after Christmas. Are people going to stay home and not spend?

GEEWAX: It's true that the holiday shopping season really doesn't end with December 25th. There's an awful lot of shopping that goes on between the 25th and the end of January because people bring things back to the store. While they're there, they shop when they're doing their returns. So really, the retail season looks at the holiday shopping all the way into January, and that's why it's very interesting to be at this point where we don't know what's going to happen with both that payroll tax cut and the unemployment benefits. So both of those things are hanging over the retail world as they head into the back end of this holiday shopping season.

KEYES: If Congress doesn't come to a deal, how badly will this hurt the economy in the long run?

GEEWAX: Well, there are different estimates out there, but it's pretty unanimous that economists think that, in the short term, at least, it will hurt the economy. One estimate I've seen is that it could reduce growth by as much as one and a half percent of growth, so that means instead of, say, a fairly healthy three percent growth, maybe you're looking at one and a half percent growth in the first six months of 2012. So that's really quite substantial.

That's assuming both of these things, the payroll tax cut holiday doesn't happen and the unemployment benefits aren't extended. The idea here is that, really, that money that the unemployed get is a stimulus. It lets you go out and buy groceries. It lets you buy clothes for your kids, whatever, and if you don't have that government check, until you can find a paycheck, you're in trouble, and that will hurt a lot of retailers.

KEYES: Vincent, I wonder, if you could speak directly to some of our lawmakers, what would you say to them?

VINCENT BRANDON: I would just definitely say just think of Americans as if they were your family members. You know, if I was your family member, would you continue to drag your feet? Would you continue to hesitate in ironing out a deal that would, you know, that would benefit your family members? You know, we are mothers, fathers, we're sisters, we're brothers, we're cousins. We are related to you in every way, so why not think about us in that way, as if we were your family? Would you allow your family to continue to be neglected in this way?

You know, and that's the way that many of the workers, the unemployed workers in my area that I have talked to during various rallies and various press conferences, you know, they're all saying the same thing. They're really feeling neglected by their elected officials.

KEYES: Got to thank you both for your thoughts. Marilyn Geewax is NPR's senior business editor. She was with us here in our Washington, D.C. studio. And Vincent Brandon was laid off from his job as a bus driver in March. He was kind enough to join us from member station WQED in Pittsburgh.

Thank you both, and Vincent, good luck.

BRANDON: Thank you, Allison.

GEEWAX: You're welcome.

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