Sunday, January 05, 2014

Update: Extended unemployment benefits

by Bill McBride on 1/05/2014 01:04:00 PM

Not extending unemployment benefits is a clear policy error, and extending the program has widespread support.  This why doesn't Congress extend the program this week?

From CNBC: Facing cuts, long-term unemployed brace for grim new year

Nancy Shields is among the millions of unemployed Americans who are losing their extended unemployment benefits starting this month.

Many like Shields depend on these meager payments, a federal extension of state unemployment programs that expired Dec. 28, to stay afloat.
...
The National Employment Law Project estimates that more than a million Americans are in the same situation. "For a lot of people and a lot of families, this is their only income source," said NELP federal advocacy coordinator Judy Conti. "This could pull the rug out from under 1.3 million families," she said. Without an extension, an additional 2 million will fall off the rolls in the first half of the year.
From the NELP: New Poll Finds Strong Voter Support for Renewing Federal Jobless Aid
Only one-third of voters believe Congress should allow federal jobless aid to end this week. By a strong 21-point margin, voters say Congress should act to maintain (55%) rather than cut off (34%) these benefits.

There is also more intensity of feeling on the side favoring an extension. More than twice as many voters strongly favor maintaining benefits (43%) as strongly feel benefits should end (21%).

Voters reject the claim that unemployed workers are not trying to find work. Just 33% of voters agree that most of those receiving jobless aid “are not trying to find a job, and prefer to collect benefits without working.” Instead, 57% say that the unemployed “would rather work, but cannot find a job in today’s economy.”
Also from NELP: Congress’s Failure to Renew Federal Unemployment Insurance Means Share of Unemployed Receiving Jobless Aid Will Hit Record Low
As a result of Congress’s failure to renew federal jobless aid for the long-term unemployed in its budget agreement, the share of unemployed workers receiving jobless aid will drop to a record low of just one in four (26 percent) as of January 2014, according to an analysis released today by the National Employment Law Project. Not only is this the lowest share during this downturn, it is the lowest since the U.S. Department of Labor started recording this information in 1950.

The loss of federal jobless aid will not only be a tough hit on unemployed workers and their families, but will also hit the economies of struggling states.

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