Lawmakers Fiddle While the Unemployed Get Burned

June 16, 2010 at 11:59 am

As Congress dithers over the latest jobs bill, unemployed workers throughout the country face another week of uncertainty about their unemployment insurance (UI) benefits. A needed extension of the temporary UI benefits and subsidized COBRA health insurance in last year’s Recovery Act is being “held hostage” (as the New York Times puts it) to misguided budgetary concerns and wrangling over how big a tax break wealthy investment fund managers should have.

The details are complicated, but the bottom line is simple: today, unemployed workers have much less help than they did before the Recovery Act’s UI/COBRA provisions expired on June 2 — and much less than they need given the difficult labor market.

  • People who were receiving benefits under the federal Emergency Unemployment Compensation (EUC) program when it expired on June 2 were not immediately cut off, but many will end up receiving fewer weeks of EUC benefits than they otherwise would have. And of course, people who have (or will) run out of their 26 weeks of basic UI benefits after June 2 receive no help through EUC if Congress doesn’t restart the program.
  • Many states have been providing additional weeks of benefits, beyond those available from EUC, through the permanent Extended Benefits (EB) program. But in 24 of those states, people receiving EB benefits got cut off immediately on June 2. Why? The Recovery Act temporarily provided full federal funding of EB (normally states have to pay half the cost), and many states responded by changing their laws to make it easier to activate their EB programs. But those changes were contingent on full federal funding, which expired along with the other temporary UI provisions on June 2. That put an end to EB payments in these 24 states.
  • What all this means is that at a time when the average jobless worker has been looking for work for 34 weeks — the longest stretch on record — and there are five job seekers for every opening, unemployed workers in 36 states who run out of their 26 weeks of basic UI benefits get no additional help.

    Restoring these benefits and tackling the country’s huge jobs deficit should be Congress’s top priority. It’s past time for lawmakers to turn this map

    back into this one

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More About Chad Stone

Chad Stone

Chad Stone is Chief Economist at the Center on Budget and Policy Priorities, where he specializes in the economic analysis of budget and policy issues. You can follow him on Twitter @ChadCBPP.

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1 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. jonathan #

    But according to the right wing of the GOP and certain economists who should go unnamed, unemployment is a vacation that workers choose because UI subsidizes them to stay jobless.

    You might address the research that says UI does increase unemployment for a short period of time in markets where there are jobs. Just to show that you aren’t biased. Of course, UI’s existence also means employers can layoff people in the knowledge that UI exists to carry them over to their next job, so that UI functions as a lubricant for labor market mobility.

    The other right wing argument is that UI means that people stay where they are rather than move – though a typical example of an available “job” is picking fruit in rural Washington for the harvest season! This is a more difficult argument to address because it’s not rational.

    I’m mentioning these points because I spend some of my time discussing things with people in the outside world and they actually believe junk like this so you have to address their arguments, even though they’re often irrational.

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