Unemployment Benefits Set To Expire For Millions of Americans
If Congress doesn't extend unemployment benefits by the end of December, some 2.2 unemployed persons will lose their benefits by February.
The White House released a report [PDF] late last week making the case that the extension is key to maintaining economic recovery, in addition to helping job seekers keep their heads above water.
“These benefits enable the unemployed to search for jobs that utilize their skills and help to stabilize the aggregate economy by providing income support to a population with a high marginal propensity to consume during times when the economy is weak,” reads the report.
Federal unemployment benefits—which only kick in after unemployed individuals have exhausted their state unemployment, which can last up to 26 weeks—currently last up to 73 weeks, the longest they've been good for since the 1970s.
“It helps keep people in the labor force and the extended benefits have helped keep the long-term unemployed in the job market,” chair of the White House Council of Economic Advisers Alan Krueger told the Denver Post. “It puts more money in people's pockets.”
Economists with the Center for American Progress, a progressive think tank of which Campus Progress is a project, compiled a list of reasons why unemployment benefits help the economy. For instance, unemployed persons tend to put benefits back into the market "quickly and completely." And if unemployment benefits end, the economy stands to lose some $50 billion in demand.
One school of thought holds that continuing to extend unemployment benefits allows job-seekers to be choosier about what job they end up taking. Others see unemployment benefits as the last barrier between workers desperately searching for a job and financial catastrophe.
“I don't know anybody who's out of work and is receiving some unemployment insurance believes that that payment is sufficient not to find a job,” said Senator Max Baucus (Mont.). “The payments are so much lower than any salary or wage would be, it's just ridiculous.”
There are currently nearly five workers looking for work for every job available, according to the Center for American Progress.
The impact of letting unemployment insurance expire varies tremendously between states. 356,900 Californians would lose their benefits, while only 123,900 individuals in the similarly populous Texas would lose theirs. And in South Dakota, only 500 unemployed persons would lose their benefits.
Meanwhile, the Labor Department announced Thursday that new unemployment claims are downto their lowest rate since mid-2008.
Jon Christian is a reporter with Campus Progress. Follow him on Twitter @Jon_Christian.