by Mike Hall
Earlier this year, the AFL-CIO pushed hard for Congress to extend unemployment insurance (UI) benefits beyond the normal 26 weeks as part of a stimulus package to address growing joblessness and a nose-diving economy.
President Bush indicated that extending UI benefits was veto bait for the bill and said unemployment wasn’t high enough to justify an extension. It was dropped from the bill.
Yesterday, Maurice Emsellem, policy co-director for the National Employment Law Project (NELP), told the House Ways and Means Subcommittee on Income Security and Family Support that the Bush administration’s “claim that the unemployment rate is not high enough to justify an extension of jobless benefits” fails to recognize that the rate has become a lagging indicator of economic recovery. Thus, waiting to extend benefits until after the unemployment rate increases further is akin to closing the door after the recession horse has already left the barn.
Rep. Jim McDermott (D-Wash.), the subcommittee chairman, and Rep. Phillip English (R-Pa.) introduced a bill (H.R. 5749) this week that would provide up to 13 weeks of extended unemployment benefits in every state and 13 additional weeks in states with high unemployment. Says McDermott:
Congress should tell these people that help is on the way…We should extendunemployment benefits now. It’s the right thing to do for workers and their families, and it’s the right thing to do for our economy. We have almost twice as many long-term unemployed workers compared to the beginning of the last recession, and nearly all of the economic indicators are telling us the employment picture will get even worse in the coming months.
In the past three months, the U.S. economy has shed more than 160,000 jobs (more here,here and here), and most analysts expect the trend to continue. McDermott noted that in the past 12 months, 1 million workers have been added to the jobless rolls and some 3 million are expected to exhaust their UI benefits before finding work in 2008. Figures show that long-term unemployment is growing faster than in previous economic downturns or recessions. Heidi Shierholz, an economist at the Economic Policy Institute (EPI), told the subcommittee:
Long-term unemployment is unusually high given the current unemployment rate….The fact that a much a higher portion of the unemployed have been unemployed long-term, shows that the unemployment rate alone is insufficient in capturing how difficult it is in today’s labor market for many people to find a job.…Immediately extending unemployment benefits is not only the right thing to do for the families of the long-term jobless in this demonstrably slow and slowing labor market; it is also very smart economic policy.
UI benefits not only give a hand to jobless workers, their families and communities—it is one of the quickest and most effective economic stimulus tools available. Says Emsellem:
Extended jobless benefits immediately boost the economy (by a factor of $2.15 for every dollar of benefits circulating), while also providing targeted relief to struggling homeowners and those communities hardest hit by the foreclosure crisis.
Congress now has a fundamental choice that will significantly influence the nation’s economy and these struggling families—whether to further delay extending jobless benefits, thus causing more economic hardship, or act now to provide the economic boost that the unemployment system was intended to deliver to prevent a more serious economic downturn.