Monday, July 11, 2011

Living On the Edge - But With a Net

Last Friday's unemployment report was a disappointment, to put it mildly.

Analysts were calling for job growth to be +100,000 or more, but only 18,000 jobs were added to the economy in June. The unemployment rate rose to 9.2%. There are millions of Americans who have either given up looking, or are taking jobs far below their skills.

For an economy that officially is two years into a recovery, this report confirms that the U.S. remains stuck in a deep economic funk.

And yet, just a day before Friday's horrific jobs number, we received the troubling news that Americans are getting fatter. Obesity - and concomitant health issues like type 2 diabetes - is a serious problem for the U.S.:

Obesity rates among adults now exceed 25 percent in more than two-thirds of the states, according to the report, and these rates climbed in 16 states over the last year. None of the states had a decline. The states with the highest rates tended to be in the South, with Colorado boasting the lowest obesity rate, under 20 percent.

This apparent contradiction between a country mired in economic misery, and a populace that is eating too much, reflects both the benefits, as well as the downside, of the safety nets that protect us all.

Two generations ago - during my grandparents' time - if you didn't have a job, you were in serious trouble. You could literally starve to death, or go without a doctor's care, because you didn't have the money to pay for food or services.

Today, thanks to programs like unemployment insurance, Medicaid, and Social Security, most Americans can receive most of their basic needs. While the debate in Washington rages on as to how to pay for this blanket of security under which we all sleep, no one is seriously discussing eliminating any of these programs.

But benefits might soon be cut, as funding begins to dry up for some of these programs. As this morning's New York Times discusses:

Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics. In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government.

By the end of this year, however, many of those dollars are going to disappear, with the expiration of extended benefits intended to help people cope with the lingering effects of the recession. Moody’s Analytics estimates $37 billion will be drained from the nation’s pocketbooks this year.