Democrats work to extend jobless benefits
A job seeker looks through job listings at the East Bay Works One-Stop Career Center on Jan. 9, 2009, in Oakland, Calif. The unemployment rate in the U.S. surged to 7.2% in December, reaching its highest level in 16 years.
TEXT OF INTERVIEW
JEREMY HOBSON: Now let's get to those unemployment benefits. Democrats have been trying to pass a $12 billion package that would extend jobless relief for millions of Americans. Republicans have so far said no because the package would add to the deficit.
Let's turn to Juli Niemann, an analyst with Smith Moore and Company. She joins us live from St. Louis as she does every Tuesday. Good morning.
JULI NIEMANN: Good morning Jeremy.
HOBSON: So if nothing is passed today, a couple of million people will lose their benefits. What does that mean for our economy?
NIEMANN: Basically you're going to see a decline in what very modest consumer buying there is now. A decline in consumption typically leads a decline in employment at worst, and at best, no new hiring. And 70 percent of our economy depends upon consumption. So this is just another wet blanket over everything.
HOBSON: So a decline in consumption. Now Juli -- I'm sure you've heard this argument that some have made that by extending, by continuing to extend that you reduce the incentive for people who have been out of work to go and find new work. What's your take on that?
NIEMANN: Well the big argument is that now is it welfare, or is it unemployment benefits? Unemployment benefits are really the best stimulus that a government has available. It's very direct, it's very effective, and it's a good economic stabilizer. But trying to find a job is the key thing. You know most people now are trying to find any job they can find. Some people want jobs at their former level, suitable work in line with training and experience that they had before. The problem is we've got age discrimination going on out there. And there's an out of work bias as well. If you're out of work it's much tougher to become employed rather than somebody who just moves from jobs. So there are many things stacked against people trying to find jobs right now. And they're going to be reduced to trying to take anything they can find. But even those jobs are being taken very quickly as well. And we're talking about very low level retail jobs, pet walking, dog sitting, virtually anything that can keep a little bit of bread on the table. So we're looking at this significantly lower levels of consumption for 2 million people immediately and this could continue on.
HOBSON: Alright well a lot a stake in this debate in Congress today. Thanks Juli.
NIEMANN: You bet.
HOBSON: That's Juli Niemann, and analyst at Smith Moore and Company in St. Louis.