National Consumers League

Stimulus to Aid Those Who Most Need It


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by Sally Greenberg, NCL Executive Director According to a recent New York Times poll, 55 percent of Americans are earning enough to just make ends meet; 6 in ten of those polled say they fear that someone in their household could lose his or her job in the next year. Sixty percent said the economic outlook is “very bad.” Despite those gloomy numbers, more than 75 percent still said they were optimistic: 55 percent said  they are optimistic about the next four years with Barack Obama as president. That’s important, because the economic situation is dire, and the President is going to need a lot of wind behind his back to make his new budget – and the stimulus package that goes with it – work for our country. The stimulus contains badly needed help for those on the bottom rung of the workforce, those who have lost their jobs and need help from an important safety net: unemployment insurance. But it comes with strings attached for any state that accepts the money. The issue of providing help for those who’ve lost their jobs goes back to NCL’s roots – Florence Kelley, the League’s first General Secretary, advocated for unemployment insurance many decades ago. In 1922, the National Consumers League worked for passage of a bill that provided unemployment insurance in Wisconsin, the first such bill of its kind and did the same over a decade later, testifying in Albany before the New York Legislature for passage of unemployment insurance. NCL also testified before Congress in the 1930s for federal support for state unemployment insurance. Along with minimum wage and limits on working hours, NCL’s leaders believed that help for those who, through no fault of their own, had lost their jobs, was a critical part of the economic safety net. However, today, unemployment insurance is not available to everyone who has lost a job. And some states provide such restrictive coverage that those in greatest need cannot get help. So the stimulus law says that states getting stimulus money must extend unemployment protections to low income workers and others previously denied compensation. To qualify for the first 1/3 of federal aid, the states need to fix eligibility requirements that exclude low income workers. To qualify for the rest of the aid, states have to chose from a series of options that include extending benefits to part time workers or those who leave their jobs for urgent family demands, like domestic violence or a very sick child. The National Employment Law Project or NELP, whose legal co-director, Cathy Ruckelhaus, spoke at the League’s Muller v. Oregon conference held in June of 2008, says that 19 states qualify for some of the federal financing, and a dozen others could become eligible by making some small changes in their eligibility requirements. Workers in the Deep South are the worst off – Louisiana, Mississippi and Texas stand out. Shockingly, some Southern state governors are threatening to reject this federal assistance for their poorest workers because they argue it could lead to new state taxes, among them Governor Bobby Jindal of Louisiana and Governor Mark Sanford of South Carolina. This is a disturbing stance, given the high rates of unemployment in these states. We agree with the New York Times: “... by dumping billions of dollars into shrinking state unemployment funds, which puts money into the hands of people who spend it immediately on food and shelter, the stimulus could help states through the recession and into a time when unemployment trust funds can be replenished. In other words, the stimulus could make a tax increase less likely.” This federal assistance comes at a critical moment in history and governors should welcome it on behalf of their citizens, not find poor excuses for rejecting funds badly needed by the lowest income workers in their states.