Mitt really means he's not concerned about the poor (photo: Gage Skidmore)

Democratic operatives are pouncing on Mitt Romney’s statement to CNN that he’s not concerned about the “very poor.” His context is that we already have a safety net for the very poor, and he wants to focus on the middle class. This may be unstated, but it’s the dominant perspective of everyone who runs for President. That’s because the middle class votes at higher rates than the very poor. Furthermore, about 80% of the country considers themselves middle class, a logical impossibility but one that gets exploited by Presidential campaigns. If you say you want to focus on the middle class, you’re effectively talking to the whole electorate, regardless of whether or not they will be helped by your proposals.

In this case, however, I think it’s fair to say that Romney isn’t concerned about the very poor because his policies exhibit a lack of concern for the very poor. Despite the fact that the full quote was “I’m in this race because I care about Americans. I’m not concerned about the very poor. We have a safety net there. If it needs repair, I’ll fix it,” a glance at his policy prescriptions shows that he wants to “fix” the safety net for the people who pay it, not for those provided services from it.

[...] if you read Romney’s policy agenda what he appears to think about the social safety net for the poor is that it should be drastically curtailed. He proposes the following five points:

Immediately cut nonsecurity discretionary spending by 5 percent.
Reform and restructure Medicaid as block grant to states.
Align wages and benefits of government workers with market rates.
Reduce federal workforce by 10 percent via attrition.
Undertake fundamental restructuring of government programs and services.

In other words he wants to cut the safety net, cut the health care part of the safety net, muck around with the federal workforce, and then cut the non-health care part of the safety net.

I don’t know how you can characterize it any other way. Mitt Romney thinks the problem with the safety net is that it’s too generous and the rest of the country cannot afford it. So he would cut Medicaid, gut the part of the budget that includes Section 8 housing and a host of other federal safety net programs, and reduce the workforce that provides the services, making it more difficult for recipients to get the benefits. Cutting programs to the poor, then, is the goal. That’s how benefits in general terms from federal spending, which is what Romney wants to cut significantly (by about 25%).

In fact, Romney brought up almost all the programs cited above, the ones he wants to cut, as a reason why the safety net is working: “We have a very ample safety net and we can talk about whether it needs to be strengthened or whether there are holes in it, but we have food stamps, we have Medicaid, we have housing vouchers. We have programs to help the poor, but the middle-income Americans there are the folks that are really struggling right now and they need someone that can help get the economy going for them.” Right, and so he has as major parts of his plan the block-granting of Medicaid, which will drastically reduce spending on it, and cuts to the budget that includes housing vouchers and food stamps, and cuts to the workforce administering those programs.

In other words, Romney doesn’t really have to tell us he’s not concerned about the very poor. We know.

Newt deserves credit for today's larger food stamp programs and shame for demagoguing on it (Photo: gage skidmore)

With Newt Gingrich throwing around the phrase “food stamp President” like he’s about to drop a new track featuring Kanye with that title, attention is starting to be paid to his claims. Gingrich never tires of calling Barack Obama a food stamp President, saying that the food stamp rolls increased by the highest amount in history under this Administration. As a technical matter, this is not true. George W. Bush actually put more people on food stamps than any President in American history, mainly because of a change to encourage enrollment by state governments during his two terms, as well as the beginnings of the recession.

But that doesn’t totally get at who is responsible for the increase in food stamp benefits. And whoever we can point to as the responsible party should take a bow, because the food stamp program is wildly successful, increasing economic activity, creating jobs and keeping millions of Americans out of poverty.

As Brooks Jackson points out, the economic downturn that began in December 2007 made 4.4 million Americans newly eligible for food stamp benefits. The Obama Adminstration included increased benefit levels in the 2009 stimulus, making the program more attractive and increasing the rolls as well. But there’s a reason that the food stamp program, or SNAP, became a vehicle for direct benefits to poor Americans. It can be traced back to a guy named Newt Gingrich.

In 1996, Gingrich succeeded as House Speaker in passing welfare “reform,” which decimated the welfare program, particularly its ability to respond during times of economic stress. Because TANF (welfare) is block-granted, it cannot increase when more people become eligible for it. As a result, SNAP became one of the easiest ways to provide needed benefits to struggling Americans. The Center on Budget and Policy Priorities writes that “SNAP’s role in the safety net has been all the more important because TANF cash assistance has not been available to many unemployed low-income families.” The 1996 welfare reform made cuts to SNAP, most of which remain. But it’s still expandable during a downturn, unlike TANF. In 2010, 40% of single mothers received food stamps, while only 10% received TANF funds. And this is why SNAP costs increased by 102% during the Great Recession.

In other words, without the “end of welfare as we know it,” nobody would likely have become a food stamp President. The closing of the welfare channel forced an opening of a separate channel to deliver benefits. I suppose the other option is to let the poor starve, which Gingrich must be advancing. But when he talks about “food stamp Presidents,” recognize that he’s responsible.

And he should be thrilled to take the credit! The US Department of Agriculture estimates that $1 spent on food stamps generates $1.79 for the economy, creating economic activity with one of the best multipliers of any federal program. Census data from 2011 shows that SNAP kept 5.1 million Americans out of poverty, including substantial numbers of women and children. It’s a great program that helps the food production industry, keeps struggling families afloat when the economy turns sharply against them, and which has an historically low error rate. Almost all of the benefits get directly to people with a tiny administrative overhead.

Of course, whether or not SNAP is a good program has little to do with the racial overtones of Gingrich’s remarks. He and his allies can object all they want, but he clearly is painting a picture of a “food stamp king” as a mirror to Ronald Reagan’s “welfare queens.” This is ridiculous, primarily because the plurality of food stamp beneficiaries – 36% – are white. But liberals should not shrink from defending SNAP, a massively successful program that helps people in need with a residual economic benefit. If every federal program worked this way, and if we funded them rather than tax cuts, we’d be much better off. So thanks, Newt Gingrich, for building the food stamp program to where it is today.

Mitt Romney better be prepared for headlines like this:

Special Report: Romney’s Steel Skeleton in the Bain Closet (Reuters)

Bain Capital Tied to Bankruptcy, Closing of KC Steel Plant (KC Star)

Another Romney Layoff Victim, this one a Conservative, Speaks Out (Washington Post)

Paul Krugman, ahead of the curve (as usual), parsed Romney’s comments on job creation and the lack thereof. After noting that Romney wants to take credit for every job created by a company Bain took over but denies responsibility for any losses, Krugman sums up the basic problem with Romney’s record at Bain:

When the dust settled after the companies that Bain restructured were downsized — or, as happened all too often, went bankrupt — total U.S. employment was probably about the same as it would have been in any case. But the jobs that were lost paid more and had better benefits than the jobs that replaced them. Mr. Romney and those like him didn’t destroy jobs, but they did enrich themselves while helping to destroy the American middle class.

That’s the macro picture. For the micro, check out the Reuters piece about Bain’s purchase of a Kansas City steel mill. Do go read the whole piece, but these two paragraphs give you the bottom line at the end of the day:

. . . the mill was padlocked and some 750 people lost their jobs. Workers were denied the severance pay and health insurance they’d been promised, and their pension benefits were cut by as much as $400 a month.

What’s more, a federal government insurance agency had to pony up $44 million to bail out the company’s underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees.

That’s what Krugman is talking about. Bain — under Romney’s direction — bought Armco, loaded it up with debt, paid itself some handsome dividends, and charged some hefty consulting fees. They played bookkeeping games, while not adequately managing the company itself, and ultimately Armco went belly up in 2001.  That was two years after Romney stepped down from Bain, but it was what Bain did to Armco from the time they bought it in 1993 that put it in this position.

But that’s still a pretty abstract picture. To see what “destroying the middle class” looks like on the personal level, Greg Sargent introduces us to one of the Armco workers affected by the looting and layoffs. Glen Patrick Wells worked at Armco for 34 years, and describes himself as a staunch conservative. Says Sargent:

Wells says he’s so furious with Romney that he says he’s open to appearing in TV spots against him in order to make the case he makes in the above video — even if it would mean helping Obama.

“Right now, if Romney gets in, I am so disgusted that I will probably vote for Obama and I detest him,” Wells says. “Anyone who is willing to put a predatory capitalist in office deserves to get Obama.”

Coming from someone who says he voted for George W. Bush twice and McCain once, that’s harsh. That’s the video up above, and it’s very well done. “They [Bain] walked out of here with millions. They left us with nothing.”

Looting and layoffs may look good to Wall Street, but not so good to Main Street. With a record like that, good luck reaching the conservatives in the middle class, Mitt.

Bread line, FDR Memorial Sculpture (photo: woodleywonderworks, flckr)

In the past few decades it has become much rarer for the poor to move themselves out of poverty. From the LA Times:

The ability to go from poor to rich — or at least to climb out of poverty — has become much harder to do in the last three decades, according to an analysis by Wells Fargo Securities. The percentage of low-income people who moved up the economic ladder slowed sharply from 1980 to 2009, compared with the previous dozen years, the study found.

The drop in economic mobility, combined with recently declining government aid to the poor, has left many Americans with no way to dig themselves out of poverty.

It would be one thing if the growing income inequality in our country was somehow the byproduct of America becoming a magical, frictionless meritocracy with an expanding economy that allowed anyone to rise on their own efforts.  That would define a society where anyone from any background with intelligence, drive and/or very special talent could make huge gains, a near perfect meritocracy where everyone is rewarded or punished fairly based only on their work and talent: a nation of incredibly fluid economic mobility.

That is not what has happened though. Not only has income inequality grown dramatically in the past few decades, but it has also become rarer for people to move from a lower economic class to a higher one. Together these are the indicators of a society where the people at the top are making incredible gains, not because of their talents but because they have aggressively rigged every level of the system to guarantee they can’t lose. Low economic mobility and high income inequality are hallmarks of feudal societies run by landed gentry, not nations founded on fairness and equal opportunity.

We are seeing the result of years of our country practicing lemon socialism, raw capitalism for the poor and endless advantages, welfare and bailouts for the top 1 percent.

The US Census Bureau changed its formulation of poverty for the first time in over fifty years, taking into account reductions in the cost of food while including rising costs in health care, child care, housing and transportation. In addition, non-cash government aid like food stamps and tax credits were finally included in the formulation.

When all of those figures were taken into account, it turns out that poverty is more prevalent in the United States than previously thought.

The ranks of America’s poor are greater than previously known, reaching a new level of 49.1 million — or 16 percent — due to rising medical costs and other expenses that make it harder for people to stay afloat, according to new census estimates.

The numbers released Monday are part of a first-ever supplemental poverty measure aimed at providing a fuller picture of poverty. It is considered experimental and does not replace the Census Bureau’s official poverty formula, which continues to determine eligibility and distribution of billions of dollars in federal aid for the poor.

Based on the revised formula, the number of poor people exceeds the record 46.2 million, or 15.1 percent, that was officially reported in September.

The biggest increase in poverty rates came from elderly Americans aged 65 or older. It was always a point of pride that the combination of Social Security and Medicare drastically reduced elderly poverty. Under the old statistics, just 9% of seniors were seen as living in poverty. However, because the new formula takes into account out-of-pocket medical costs, particularly rising deductibles and prescription drugs, that number has jumped by 2.7 million, and now represents 15.9% of all seniors, roughly 1 in 6. This is consistent with the rest of the population.

This is an important finding. What we’re seeing is that Social Security and Medicare are NOT ENOUGH to keep millions of seniors out of poverty. This comes at a time when the elites in Washington are trying to find ways to cut Social Security benefits or phase out Medicare. These new poverty statistics should stop that dead in its tracks. But it won’t.

Children and African-Americans saw their poverty rates decrease slightly under the new measurement, mainly because food stamps were taken into account. In other words, a government program was lifting more people out of poverty. One would assume this as an example of government working, but that’s not the case for the deficit hysterics.

Yesterday was the 15th anniversary of the Clinton welfare reform package, which “ended welfare as we know it.” In a sense, we didn’t really know how that would turn out until a time of stress. Unfortunately, for the group of low-income Americans who need welfare, that stress has been part of their lives for almost a decade. Jake Blumgart has a look back at welfare reform, and how we can assess it 15 years later.

By almost any measure, Temporary Assistance for Needy Families (TANF), the program created by the 1996 law, has failed to cushion the neediest through recessions. While in 2009 the food-stamp program responded to the increased need for government assistance, growing by 57 percent, the number of TANF caseloads merely inched upward. (It was the first time rolls increased since the law was enacted.) Six states continued to shed recipients and the actual number of families in need of assistance rose rapidly. At the heart of the worst recession in 80 years, TANF funds only reached 4.5 million families, or 28 percent of those living in poverty. By contrast, in 1995, the old welfare system covered 13.5 million families, or 75 percent of those living in poverty [...]

[cont'd.]

Federal money is distributed in a block grant that provides an annual lump sum of $16.6 billion, with no allotted increases for recession, population growth, or rises in the cost of living. Even in the best of times, this federal funding suffers the persistent grind of inflation (the real value of TANF has fallen by 28 percent since 1996). In the old system, funds increased in response to greater need.

I’ll go one further. To the extent that there was any success from TANF during the Lesser Depression, it came from the TANF Emergency Fund, which allowed states to run direct job creation programs and put 240,000 people to work. But the fund, part of the 2009 stimulus package, was not extended after it expired last September, despite being a low-cost, high bang-for-the-buck jobs program that fit with the alleged promise of welfare to work.

The Center for Budget and Policy Priorities has more evidence of how welfare is just not working to provide income support for poor families. Even as poverty has increased, TANF caseloads have gone down. And of course, that was the design. Welfare reform put onerous requirements on families seeking help and turned the program into a block grant that individual states could transform and shape at their leisure. Predictably, the states decided for the most part to grind the program down to almost nothing, particularly in the more conservative sections of the country. As as example, Blumgart cites Georgia, where prior to reform, 98 out of 100 families in poverty received some form of welfare aid. Now it’s 8 out of 100. In Wyoming it’s 1 out of 100, literally 306 families in the entire state on welfare. The average number of families receiving welfare per 100 in poverty in 1996 was 68. Now it’s 27. And the funds available are smaller even for the drastically reduced portion of families getting help. The CBPP report has all the details.

This was seen as a great political achievement back in 1996, a way for Clinton to triangulate and steal issues from his opponents. In the short-term, with a booming economy, it worked decently enough. After a decade of zero job growth, wage stagnation and a painful near-depression, welfare has just drowned in the bathtub. What has seemed to happen is that a lot of the benefits of welfare have shifted to food stamps, with 46 million Americans receiving benefits. Food stamp funding that was elevated as part of the stimulus has already been cut back twice; it won’t be long before the same group of “reformers” will demand that food stamps are block granted or changed or ended as we know it, too. And then they’ll move to Medicaid.

(photo: NJLA)

Almost every month, as the calendar winds down, I start getting calls in my office on the phone or in person from people who have more month than money. “Pastor, I’ve run out of money for food, and don’t get paid until the first of next month. I’ve got two kids, and need some help.” The specifics of the conversation vary, but the underlying substance does not.

Now, though, I’ve been hearing a different item tacked on at the end: “Pastor, you follow the news out of DC pretty well. Am I going to get my Social Security check next week?” These aren’t just old people, but folks getting SS disability checks too.

My friends who run food pantries, homeless shelters, and other emergency assistance centers are hearing the same things. They hear it from the unemployed, of course, but also from people with jobs that pay so little they can’t get by. According to Harvesters, a wholesale food bank operation that supports hundreds of food pantries, soup kitchens, and emergency in 26 counties around metropolitan Kansas City, forty percent of households turning to Harvesters include at least one adult who is working, and 73% have incomes at or below the official federal poverty level. “Pastor, am I going to get my Social Security check next week” is not a question of cash flow — it’s a question of survival.

Folks trying to climb out of poverty through education are worried, too. College students are asking about cuts to Pell Grant money.

And the good folks in Congress seem hell-bent on making things worse, by cutting government spending — and thus the jobs supported by that spending — all because of a new-found love of austerity.

In a longer piece about the less-than-good GDP numbers reported yesterday, Mark Davis of the KC Star noted this explanation for the downward revision to the Q1 GDP number:

Moody’s Analytics cited federal government activity for much of the 1.5 percentage point reduction in the first quarter economic growth rate. It said reduced estimates of government economic activity in the quarter slashed 1.2 percentage points from the earlier estimate, and slower federal activity accounted for two-thirds of that.

The government contribution to the economy also declined in the second quarter, adding to the more recent weakness.

Kind of proves David Dayen’s point about the wrongheadedness of the “let’s cut government spending a lot — RIGHT NOW.

McClatchy notes other economists chiming in with this same point.

Lawmakers trying to reach a deal on spending cuts in order to raise the nation’s debt ceiling risk causing serious economic harm if they cut government programs too much in the near term, economists warn. . . .

For folks like those who’ve been coming into my office, it would be more than a mistake. It would be a disaster.

by tsmall

Here’s Atrios, in a typically prescient post.

…even in the Strapping Young Buck era I don’t think the possession of a color TV was seen as some sort of display of obscene wealth.

Still I imagine the ZOMG FLAT SCREEN TV IS IN THE HIZZZHOUSE will long be held up as PROOF that the poor are NOT POOR.

Yep, pretty much.

Census officials continue to grossly exaggerate the numbers of the poor, creating a false picture in the public mind of widespread material deprivation, writes Heritage Foundation senior research fellow Robert Rector in a new paper.

“Most news stories on poverty feature homeless families, people living in crumbling shacks, or lines of the downtrodden eating in soup kitchens,” Rector says. “The actual living conditions of America’s poor are far different from these images.”

And what are these conditions?

“The poorest Americans today live a better life than all but the richest persons a hundred years ago.”[3] In 2005, the typical household defined as poor by the government had a car and air conditioning. For entertainment, the household had two color televisions, cable or satellite TV, a DVD player, and a VCR. If there were children, especially boys, in the home, the family had a game system, such as an Xbox or a PlayStation.[4] In the kitchen, the household had a refrigerator, an oven and stove, and a microwave.

An oven and a stove?! And these people still have the gall to accept food stamps?

Anyway, these days you can get an original Xbox — with a few games thrown in — for about $40 bucks. The poor have it so damn easy in this country.

Rep. Charles Boustany (R-LA)

It takes a special kind of bully to target the most vulnerable and neediest families in society, which millionaire politicians like to argue are draining America’s treasury. I am referring to Rep. Charles Boustany (R-LA), who recently introduced a bill that would require states to implement drug testing of applicants for and recipients of the federal Temporary Assistance for Needy Families (TANF) program. This is reminiscent of Sen. Orrin Hatch’s (R-UT) failed legislation last summer to drug test the unemployed and those receiving other forms of government cash assistance, which ultimately died in the Senate. So far, Boustany’s proposal is following the same fate as Hatch’s, but around the country states are taking matters into their own hands.

In at least 30 state Legislatures across America, predominately wealthy politicians are quite impressed with themselves for considering bills that would limit the meager amount of state help given to needy families struggling to make ends meet. Many have proposed drug testing with some even extending it to recipients of other public benefits as well, such as unemployment insurance, medical assistance, and food assistance, in an attempt to add more obstacles to families’ access to desperately needed aid.

Florida’s Legislature has passed a bill that will require welfare applicants to take drug tests before they can receive state aid. Once signed into law by Republican Gov. Rick Scott, which is likely, all adult recipients of federal cash benefits will be required to pay for the drug tests, which are typically around $35. In Maine, Republican lawmakers introduced two proposals that would impose mandatory drug testing on Maine residents who are enrolled in MaineCare, the state’s Medicaid program for low-income and disabled residents. Under a similar bill that passed both the House and Senate in Missouri, recipients found to be on drugs will still be eligible for benefits only if they enter drug treatment programs, though the state wouldn’t pick up the tab for their recovery.

In Massachusetts —where about 450,000 households receive cash or food assistance — a bill introduced by state Rep. Daniel B. Winslow (R-Norfolk) would set up a program requiring those seeking benefits to disclose credit limits and assets such as homes and boats, as well as the kind of car they drive. His reasoning is “If you have two cars and a snowmobile, then you aren’t poor. If we do this, we will be able to preserve our limited resources for those who are truly in need and weed out fraud, because we know there’s fraud and we’re not looking for it.” State Rep. Daniel K. Webster (R-Pembroke) filed a budget amendment requiring the state to verify immigration status of those seeking public benefits. Webster made it clear that his proposal does not mean he dislikes poor people or immigrants, but “this is all unsustainable and the system is being abused.”

This is rather shocking because I can’t recall any Republicans or Democrats demanding that the CEO of Bank of America or JP Morgan disclose inventory of their vacation homes, private jets, and yachts before bailing them out in what amounts to corporate welfare. Nor did they insist that these CEOs submit to alcohol and drug screenings before receiving taxpayer money. No objections were made regarding the immigration status of the people running these companies or whether they happen to employ undocumented workers for cheap labor. [cont'd.]

Some would argue that corporations are different, in that they create jobs. To that I will point out that corporations are making record profits, even as they layoff workers and pay next to nothing in Federal income taxes. And this doesn’t even begin to scratch at the surface of corporate abuse by the very entities that are soaked in taxpayer money. Just contrast these proposals with the way the rich are treated in this country with billions of dollars in subsidies and tax breaks.

This is simply an extension of a conversation that began in 1996, when President Bill Clinton and House Speaker Newt Gingrich passed bipartisan welfare reform, whose results have been tragic to say the least. The 1996 Welfare Reform Act authorized, but did not require, states to impose mandatory drug testing as a prerequisite to receiving state welfare assistance. Back then, unproven allegations of criminal behavior and drug abuse among welfare recipients were the rationales cited by those in support of the bill’s many punitive measures that were infused with race, class, and gender bias.

The majority of the proposals for drug testing require no suspicion of drug use whatsoever. Instead they rest on the assumption that the poor are inherently inclined to immoral and illegal behavior, and therefore unworthy of privacy rights as guaranteed under the Fourth Amendment. These proposals simply reaffirm the longstanding concept of the poor as intrinsically prone to and deserving of their predicament. Jordan C. Budd, in his superb analysis Pledge Your Body for Your Bread: Welfare, Drug Testing, and the Inferior Fourth Amendment, demonstrates how the drug testing of welfare recipients is part of what’s called a “poverty exception” to the Constitution, particularly the Fourth Amendment, a bias that renders much of the Constitution irrelevant at best, and hostile at worst, to the American poor.

Kaaryn Gustafson extensively documents the trend toward the criminalization of poverty. She demonstrates how, in her words “welfare applicants are treated as presumptive liars, cheaters, and thieves,” which is “rooted in the notion that the poor are latent criminals and that anyone who is not part of the paid labor force is looking for a free handout.” I would argue that given the disdain that has been shown for “entitlements” over the years, it won’t be long before this treatment extends to Social Security, Medicare, and even Financial Aid recipients.

The notion that the poor are more prone to drug use has no basis in reality. Research shows that substance use is no more prevalent among people on welfare than it is among the working population, and is not a reliable indicator of an individual’s ability to secure employment. Furthermore, imposing additional sanctions on welfare recipients will disproportionately harm children, since welfare sanctions and benefit decreases have been shown to increase the risk that children will be hospitalized and face food insecurity. In addition, analysis shows that drug testing would be immensely more expensive than the acquired savings in reduced benefits for addicts

With regard to welfare legislation, it’s beneficial to highlight where on the class ladder members of Congress stand. According to a study by the Center for Responsive Politics released late last year, nearly half of the members in congress — 261 — were millionaires, compared to about 1 percent of Americans. The study also pointed out that 55 of these congressional millionaires had an average calculated wealth in 2009 of $10 million dollars and up, with eight in the $100 million-plus range. A more recent study released in March, found that 60 percent of Senate freshman and more than 40 percent of House freshmen of the 112th congress are millionaires.

Why is this so important? Because very few of our lawmakers understand what it’s like to struggle financially. Millionaires can generally afford healthcare without grappling with unemployment, foreclosure, or an empty refrigerator. The majority of our representatives haven’t a clue what the daily lives of the people they represent are like, let alone the constant struggle of single mothers living below the poverty line. They are constantly arguing that we all must sacrifice with our pensions, our wages, our education, the security of our communities, and with the belly’s of our children, while they sit atop heavily guarded piles of money.

With the ranks of the underclass growing and the unemployment level at a staggering 9%, it’s more clear than ever that the wealth divide between “we the people” and our representatives has caused a dangerous disconnect. State and federal legislators claim to be acting fiscally responsible, but they support budgets that create unimaginably difficult circumstances for the lives of the most vulnerable people, especially children. There is no question that these newest proposals amount to class warfare, and the longer we ignore it, the more it will spread.

Recessionary Job Losses in Post-WWII Downturns, click to embiggen (image: Calculated Risk)

Tomorrow is May 1, and college graduation season is almost upon us. Seniors everywhere are writing their last papers, taking their last exams, and preparing for the end of their college careers.

And probably crying about the employment situation. College placement officers might as well be grief counselors.

For the last three years, the unemployment picture has been Ugly with a capital U. Those who doubt this need only look at the chart to the right. Bill McBride of Calculated Risk has a real knack for turning data into charts and words that make even non-math folks understand what the numbers are saying. (Click here for a larger version of that chart.) Putting the numbers into words at the beginning of April, Bill summed things up like this:

The current employment recession is by far the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only the early ’80s recession with a peak of 10.8 percent was worse).

In a post yesterday, Naked Capitalism guest poster George Washington agrees, and breaks down the employment mess in depressingly clear detail.

It’s ugly all around — especially if you are a college student approaching graduation.

The Economic Policy Institute released a briefing paper last week with the ominous title “The Class of 2011: Young workers face a dire labor market without a safety net“. From their executive summary:

The Great Recession left a crater in the labor market that has been devastating for unemployed Americans of all ages. After more than two years of unemployment at well over 8%, we have a hole of more than 11 million jobs, with average spells of unemployment lasting nearly nine months. But the weak labor market has been particularly tough on young workers. In 2010, the unemployment rate for workers age 16-24 was 18.4%—the worst on record in the 60 years that this data has been tracked. Though the labor market has started to slowly recover, the prospects for young high school and college graduates remain grim.

I disagree. After reading through the whole paper, I’d say the word “grim” is far too tame. From pp 6-8:

Given that the unemployment crisis for young college graduates created by the economic downturn has yet to show signs of improvement, the class of 2011 will join the backlog of un- or underemployed graduates from the classes of 2010 and 2009 in an extremely difficult job market. In fact, it is likely that the class of 2011 will face the highest unemployment rate for young college graduates since the Great Recession began. . . .

Furthermore, as discussed earlier, the high overall unemployment rate of young college graduates masks large differences among racial and ethnic subgroups. Black and Hispanic college graduates experience significantly higher unemployment rates during economic downturns than do white college graduates . . .

In 2007, the unemployment rate for young college graduates was 5.1% for white workers, 6.6% for Hispanic workers, and 13.1% for black workers. In 2010, the disparities increased dramatically, as unemployment rose 3.3 percentage points for white graduates (to 8.4%), 7.2 points for Hispanic graduates (to 13.8%), and 5.9 points for black graduates (to 19.0%). . .

While it is true that even in the broader labor market, unemployment rates for blacks and Hispanics are higher, there arguably should be little disparity in the unemployment rates of young college graduates. Not only do they have the same basic degree, but they also are in the same labor market position (i.e., college graduates under age 25 who are not enrolled in school and are actively looking for a job).

Note: these are the folks who are fresh out of school, and so in theory ought to have all the right up-to-date training that older unemployed folks may need. Kind of puts a lie to the whole “we need to get folks retrained for the new economy, and that will take care of the jobs problem,” doesn’t it?

And to go with all those new skills, the graduates have the loans. Boy, do they have the loans. From the Dept of Education’s FinAid website:

Few students can afford to pay for college without some form of education financing. Two-thirds (65.6%) of 4-year undergraduate students graduated with a Bachelor’s degree and some debt in 2007-08, and the average student loan debt among graduating seniors was $23,186.

Think about that number for a minute, folks: that’s like graduating with a car loan but not getting the car. (Don’t even ask about loan loads for professionals, like lawyers, doctors, or clergy, many of whom complete their advanced degrees with the equivalent in student loans to a mortgage — without getting the house.) And those are the loan figures for the 2007-08 graduates. Given the rising cost of college, they are no doubt higher for 2010-11 graduates.

The most painful part of the EPI report, though, is that newly-minted college grads have almost no social safety net to help them. No unemployment insurance benefits, because they haven’t worked. Almost no possibility for even tiny support via TANF (welfare) or SNAP (food stamps). They can stay on their parent’s medical insurance, though — assuming that their parents can do that for them. Of course, to use the insurance and actually get health care, you have to be able to come up with co-pays and deductibles and out-of-pocket expenses . . .

Maybe this kind of situation explains this: a million applications for 50,000 McJobs. But here’s the worst part of that story. If you are a new graduate and were lucky enough to get hired, you are in the unenviable position of trying to pay off $23,000+ in loans on a McPaycheck.

Glad I’m not a commencement speaker this year.