Cutting jobless aid will be costly
If some of your neighbors don’t seem too happy about the new year, it could be because Congress decided to go home and party without extending unemployment benefits.
After patting itself on the back for barely passing a budget deal, Congress left 1.3 million long-term-unemployed Americans without any obvious means of support. Lawmakers didn’t include an extension of unemployment benefits in the budget deal, so the program expired on Saturday.
In addition to the current beneficiaries, an extension would have helped an additional 850,000 people who are expected to have been out of work for more than six months as of March.
The federal aid serves as a backup for people who have exhausted their state benefits, which typically last six months. The program has been extended regularly since 2008, when it was instituted to help victims of the recession and heightened unemployment that followed the financial collapse. The recipients are people who are trying to keep their lives together as they look for work, which they are required to do to continue receiving benefits.
Even though national employment looked better last month, it hasn’t improved enough to scrap this program. At a national unemployment rate of 7 percent, too many Americans still don’t have jobs. Consider that long-term benefits were extended for the first time when unemployment hit just 5.6 percent.
It’s particularly disconcerting that the number of long-term jobless who are still looking for work continues to increase, having reached 2.3 percent of the workforce. Many of these people could fall into poverty. Helping them out of the pit at that point would be far more expensive than extending their unemployment assistance now. In the eight downturns since 1958, long-term unemployment benefits haven’t been cut until that figure dipped below 1.3 percent.
The premature discontinuation of these benefits threatens the economy as well as families. Benefit checks are quickly spent on necessities like rent and food, fueling economic activity. According to the Economic Policy Institute, the loss of this $25 billion program could kill another 310,000 jobs.
The best news for the long-term unemployed may be that the House is up for election in 2014. Voters would be wise to ask the lawmakers trying to hold on to their jobs what they plan to do for those who have lost theirs in this difficult economy. The answer should guide people’s choices in the new year.