The new year will start for many Americans not with cheers but with tears. They are among the 1.3 million whose federal jobless benefits ended when Congress failed to extend the aid program for another year. Another estimated 1.9 million who would have qualified for the benefits in the first half of 2014 will also find the help door closed.
At a time when long-term joblessness remains exorbitantly high – higher than it was during the 1980s recession – Congress’ failure to keep this benefit in place is a kick in the gut to Americans who are already down for the count and struggling mightily to get up.
Critics have said the extended benefits discourage the unemployed from accepting jobs and that the program should be curtailed, given the recovery in the nation’s labor market.
But while studies show benefits may discourage some of the short-term unemployed from seeking jobs, that’s simply not the case for the long-term unemployed for which these benefits would help. And for the long-term jobless, the job market remains bleak.
Labor Department statistics underscore the reality: At the end of October, there were 3.9 million job openings across the United States. That same month, 11.3 million people were looking for work but couldn’t find it.
Long-term unemployment is the highest it has ever been with 4 million Americans out of work for more than six months, about 1 million higher than it was at its previous peak during the recession in the 1980s. When President George W. Bush signed a bill extending long-term jobless benefits, the unemployment rate was 5.6 percent. It’s 7 percent today. And in each of the past three recessions, Congress didn’t end extended aid until the long-term rate dropped to 1.3 percent. Currently, it’s 2.6 percent, according to the Center on Budget and Policy Priorities. That’s as bad as the peak of long-term unemployment in any previous recession since the end of World War II.
Lawrence Mishel, president of the Economic Policy Institute in Washington, is right. Cutting off these benefits “lacks compassion for the victims of the recession and, economically, it’s shooting ourselves in the foot. The timing is very premature. The evidence is that people who want work can’t find it.”
Extending benefits for another year would cost $25 billion but spur the economy enough to create about 200,000 jobs, the Congressional Budget Office estimated.
Senate Majority Leader Harry Reid, a Democrat from Nevada, said he will bring up an extension when Congress reconvenes next month. And a bipartisan plan for a three-month extension is being urged by Senators Jack Reed, D-R.I., and Dean Heller, R-NV, while Congress figures out a way to cover the cost. The House, which stymied previous efforts, should get on board too.
Extending these benefits will be good for the recipients, and good for the country.
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