|"Only dull people are brilliant at breakfast"
|"The liberal soul shall be made fat, and he that watereth, shall be watered also himself."
-- Proverbs 11:25
An estimated two million workers in December will be cut off of federal unemployment benefits, beginning in the holiday season, if Congress does not renew the program before it expires on November 30th.
Nearly 400,000 workers were laid off just in the past six months and now face the end of their state benefits without qualifying for any federal extended benefits.
800,000 workers face an immediate “hard” cut-off of their benefits (starting December 4th in nearly half the states) after struggling to find work and pay their bills for over a year in most cases.
Since the unemployment insurance program was created in response to the Great Depression, Congress has never cut federally-funded jobless benefits when unemployment was this high for this long (at over nine percent for 17 consecutive months). The earliest Congress ever started pulling back on benefits was when unemployment reached the level of 7.2 percent nationwide.
Businesses and the struggling economy—especially the critical retail sector—will take a major blow if Congress fails to continue the federal jobless benefits during the holiday shopping season.
In 2009 alone, the increase in the number of people in poverty would have doubled were it not for unemployment insurance benefits.
With the average unemployment extension check of $290 a week replacing only half of the average family’s expenditures on transportation, food, and housing, jobless workers have a major incentive to look for work, notwithstanding the modest assistance their benefits checks provide.
The 51-day lapse of the federal extension program this summer caused substantial hardship for 2.5 million unemployed workers, underscoring the urgency of renewing the current program for another year until there is strong job growth.
The sheer magnitude of the number of workers affected by the dearth of jobs shows how inadequate recent economic recovery really is: currently, more than one in six working-age adults—or 26.8 million people—are either unemployed or underemployed. Of these, nearly 15 million are jobless through no fault of their own, and an additional 9.5 million are forced to work part time even though they want full-time work.
Taken together, these groups of unemployed and underemployed workers, as well as those
marginally attached to the labor force—people who are available for work, have looked for work in the past year, and still can’t find jobs—result in a “real” unemployment rate of at least 17.1 percent, a much more stark and worrisome measure than the already-staggering 9.6 percent unemployment rate that has persisted for the past two months. At the same time, the unemployed are experiencing record periods of joblessness: nearly 42 percent of the 15 million jobless workers are “long-term unemployed”—that is, out of work for six months or longer. Since the Labor Department began tracking this data, typical spells of unemployment have never lasted for so long, nor has long-term
unemployment affected so many millions of people.
Recent private-sector job growth has been grossly inadequate to bring down these dire rates of joblessness. In fact, the Bureau of Labor Statistics recently reported that job loss over 2009 and 2010 may have been even worse than initially reported, with 366,000 more jobs lost as of March 2010,3 resulting in 8.1 million total jobs lost over the course of the downturn. Given this, as well as weak jobs growth in 2010, the U.S. needs 11.5 million jobs to reach pre-recession levels of employment, a shocking number when considering that layoffs temporarily increased over the summer and are now
overwhelming the public sector as state and local government budgets are being slashed and federal hiring for the 2010 Census has come to an end.
Never in the history of the program have unemployment benefits been eliminated, or even reduced, when unemployment rates were so high. The only other time in the past 60 years that the unemployment rate has remained so high for so long was during the early 1980s. At that time, Congress did not cut federal unemployment benefits until the national unemployment rate had fallen to 7.2 percent—a far cry from our current rate of 9.6 percent.