WASHINGTON (WOMENSENEWS)–By now, everyone has heard the collective gasp following the release of the unemployment figures earlier this month. The Wall Street Journal, in a front-page article last week, questioned whether any federal stimulus package would make a difference given virtually certain tax increases and service cutbacks by the states. Most states and localities are required to have balanced budgets, so these are their only alternatives when their revenues fall, as they inevitably do whenever people are earning and shopping less.
The unemployment numbers released on Nov. 2 were staggering. Coupled with the negative growth in the third quarter of 2001, also recently confirmed, nearly everyone is convinced we have entered a recession. The only questions now are “How deep?” and “How long?”
Some of the unemployment figures were more disturbing than others: a 1.2 percentage point jump in unemployment among adult black women compared with a 0.3 percentage point jump among adult white women. Overall, the figures for women of all ages showed a 0.4 percentage point jump in unemployment, a very significant and large increase for one month. Given how little attention the media paid to these very high unemployment figures, especially among black women, one wonders if the average reporter really understands how much today’s families count on women’s earnings.
There are nearly 3 million more working wives than there were in 1991, nearly 4 million more working mothers, married and single, than there were 10 years earlier. Today, there are more than 6 million more children living in families with working mothers than there were 10 years ago. Today’s child is just as likely to be living with a working mother as with a working father. Today’s families are as dependent on the earnings of their working mothers as they are on the earnings of their working fathers.
So, it’s crucial that a woman’s job loss be viewed as serious a family calamity as that of a man’s. Today’s families have no “spare worker” who can be sent into the labor force to pick up odd jobs or casual employment in an attempt to replace the lost wages of the breadwinner, to supplement his or her unemployment benefits.
Fewer Women Receive Insurance Benefits Than Men; Amounts Lower
In today’s families, all available adults–men and women–are already working for pay. But, when they become unemployed, fewer women receive benefits. In 1999, only 34 percent of unemployed women received benefits compared with 41 percent of unemployed men. And when women do receive benefits, they generally receive much less than men because they earn less. In nearly every state, women are less likely to receive benefits than are men.
Women who lose their jobs fail to qualify for benefits chiefly because they earn too little to qualify. Or, they’ve left work for a “disqualifying” reason, like a new shift assignment that doesn’t match their child care availability. Or, they worked part time and are looking for part-time work. Or, they’ve just come off welfare and their recent earnings–usually three to six months of the most recent job income–are not counted toward unemployment benefits in their state. Only 12 states count the most recent earnings of the unemployed toward the minimum earnings needed to qualify.
But never fear–Congress is here. And what is it doing? So far, putting forward different versions of an economic stimulus bill in the Republican House and the Democratic Senate. There’s also a third proposal from the Bush administration and even a fourth “compromise” from centrist lawmakers.
Let’s look at the Senate and House proposals and see how each affects women workers:
Comparing Packages’ Cash Assistance for Dislocated Workers
Cost
The Senate bill is much more generous–$16 billion for worker benefits in one year, paid for from the $38 billion federal unemployment insurance trust funds. The House proposes $9 billion to be distributed to the states, with no requirement that states maintain even their current level of spending and use the funds for additional or extended benefits for workers.
It should be pointed out that the main cost of the House bill goes to tax cuts for wealthy individuals and corporations ($85.5 billion in the first year alone) and a substantial portion of the Senate bill ($21.8 billion) benefits corporations. Many economists, including nine Nobel laureates and four past members of the Council of Economic Advisers to the president, argue that this tax cut assistance to the wealthy will do nothing to stimulate the economy because they already have enough capital to invest–what they lack is customers with money to spend.
New Workers
Both proposals address unemployment insurance coverage for the new or recent worker. The Senate proposal, by explicitly including both the recent earnings of workers and workers seeking part-time work, however, is the only proposal that mandates expanded coverage. The House proposal contains a block grant for unemployment insurance, which states could use to augment benefits or to replace existing funding or even to cut employer unemployment insurance taxes. The Senate bill will help more women because it includes part-time workers and recent earnings.
Extended Benefits
The Senate would provide an additional 13 weeks of federally funded unemployment insurance payments, after regular benefits expire. The House proposal does not address this issue, but again the block grants to the states could be used for this purpose. More women would be helped under the Senate bill, with its expanded eligibility and this time extension.
Benefit Supplements
The Senate wants to increase the unemployment benefit by 15 percent or $25 per week, whichever is greater. The increase in benefits, particularly the flat $25 minimum increase, would especially help women recipients, whose benefits are likely to be much lower than men’s. The House proposal contains no provision for increased benefits.
Funding Administrative Costs
The Senate proposes an additional $500 million from the surplus trust fund to the states to help pay for administration. The House proposal is a block grant proposal that does not mandate funding for increased administration or enhancements.
Comparing the Packages’ Health Care Benefits for Dislocated Workers
Cost
The Senate calls for $17 billion for one year’s coverage for all laid-off workers. The House proposes a $3 billion state block grant to be used to help pay health care for workers who are collecting unemployment benefits. Since fewer women are likely to qualify for unemployment benefits than men, even under the more generous Senate bill, clearly the Senate proposal is preferable for women because it provides health insurance assistance for all laid-off workers. Limiting health care benefits to those receiving unemployment insurance benefits limits the pool of eligible workers substantially.
COBRA Premiums
The Senate proposes a 50 percent federal subsidy for 12 months of COBRA coverage after employment ends. (COBRA permits former employees to continue their health insurance coverage at group rates.) The House proposal has no specific requirements to cover any part of COBRA. Under the House version, states could also use the block grant funds to provide substandard health insurance products to laid-off workers. COBRA coverage goes only to those workers fortunate enough to have had health insurance coverage in the jobs they lost.
Medicaid
Under the Senate plan, states would have the option to expand their Medicaid programs to cover laid-off workers not eligible for COBRA. As an incentive, the bill provides the enhanced A-CHIP (or A-Children’s Health Insurance Program) match–a 15 percentage point increase in the state’s Medicaid matching rate, which amounts to a transfer of federal monies to the states. The House bill prohibits states from using these block grant funds for providing health care to workers through any existing federal program, including Medicaid. In New York City, streamlined Medicaid application procedures after Sept. 11 have succeeded in attracting the largest one-time increase in Medicaid enrollees since the program began. Clearly Medicaid is an attractive option for low-income families.
Critical Need for Massive Infusion of Federal Funds to States
Aid to States
The National Governors Association has found that the states’ cumulative revenue shortfall is $10 billion and growing fast. Any plan calling itself an economic stimulus must contain an infusion of funds from the federal government to the states. Otherwise, many states will be forced to raise taxes or cut health care, education or other programs in order to balance their budgets, as 49 of them are required to do by law. Neither proposal includes sufficient provision to help the states.
No less than the Wall Street Journal said, “Right now, Congress seems poised to take action that would hurt the states.” This is because all the versions contain federal tax cuts. Since most state tax plans are linked to federal taxes, any cut in federal rates translates into an automatic cut in states’ tax revenues as well.
Senate Proposal Clearly Better for Women, but Lesser of Evils
The Senate proposal is clearly better for women because it includes part-time workers (70 percent women) and workers in the tourism and retail industries (56 percent women), restaurant and waitstaff (69 percent women) and kitchen workers (65 percent women)–all industries with high turnover for which it is important to count workers’ most recent earnings. Many of these workers are recent welfare leavers (about 75 percent of welfare leavers are employed in the service industries) who haven’t been working long enough or made enough income to be eligible for unemployment benefits under current standards.
And what about the Bush administration and centrist “compromise” proposals? The Bush proposal is along the lines of the House bill, but it would extend benefits for an additional 13 weeks–but only in states with a 30 percent unemployment increase (that’s about a 1.1 percentage point increase on a base rate of unemployment of 4.9 percent) post-Sept. 11, and only available for workers losing their jobs after Sept. 11. And the “compromise?” It jettisons the part-time and recently unemployed, weakens health insurance assistance and provides no fiscal relief for the states.
So, here we have it: Two houses of Congress representing two political parties, one administration and one “compromise” from centrist lawmakers–equaling four proposals. Which is better for women? Which is better for America? Which is the lesser of evils? The Senate bill, on all counts, but even it gives far too much to wealthy individuals and American corporations in the form of permanent massive tax cuts juxtaposed against small and temporary relief for workers. Such large permanent tax cuts can only jeopardize the future of important programs for women, such as Social Security.
It’s time for our leaders to go back to the drawing board and come up with a real stimulus package that will truly stimulate the economy and provide needed assistance to workers and the states. Unfortunately, given the balance of power in the Congress, it appears that the only package likely to come forward will be bad for our country in the long run and offer only the most minimal assistance to a few workers in the short run. Given this likely scenario, most women’s groups will probably find themselves working against a tax cut package rather than for a meaningful stimulus bill.
We need an economic stimulus bill that addresses women’s needs, but we’re very unlikely to get it. All the more reason we should all be working to increase the representation of women in Congress–not to mention the White House!
Heidi Hartmann is president and executive director of the Institute for Women’s Policy Research in Washington. The institute is committed to improving women’s lives through meaningful policy research in five program areas: employment, earnings and economic change; democracy and society; poverty, welfare and income security; work and family; and health and violence. She is an economist holding a doctoral degree from Yale University. In 1994 she received a MacArthur Foundation Fellowship in recognition of her pioneering work on women and economics.
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