Extending Help to the Unemployed

SOURCE: AP/Rich Pedroncelli

A woman checks her unemployment insurance over the phone at the California Employment Development Department office in Sacramento, CA. According to estimates from the National Employment Law Project, up to 600,000 Americans will have exhausted benefits provided by the Recovery Act by the end of October.

By Alexandra Cawthorne, Melissa Boteach | October 27, 2009

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Unemployment insurance is the first line of defense for jobless families in troubled times, and it helps bring economic stability to entire communities. The current job market’s woes, however, have tested the program as never before. According to Department of Labor Statistics there is only one job for every six unemployed workers who are looking for work. Desperation is growing for these hundreds of thousands of workers who still cannot find jobs and whose unemployment benefits are dwindling, underscoring the need for Congress to quickly extend unemployment benefits in all states. The Unemployment Compensation Extension Act of 2009, H.R. 3548, would extend jobless benefits to all states for 14 weeks, with an additional six weeks for states with more than 8.5 percent unemployment. This bill has passed the House and is currently waiting to be voted on in the Senate.

Employers shed 263,000 jobs in September, putting the unemployment rate at 9.8 percent. Long-term unemployment has reached record highs and continues to rise at about three times the rate of growth in overall unemployment. About 5.4 million Americans have been out of a job for six months or more, representing over a third of all jobless workers. And while the jobless rates for all major worker groups are much higher than at the start of the recession at the end of 2007, black and Hispanic workers have faced double-digit rates of unemployment and are even more likely to be among the long-term unemployed.

The American Recovery and Reinvestment Act, passed by Congress and signed into law in February, took important steps in extending benefits for the long-term unemployed and boosted weekly benefits. It also provided billions of dollars in incentives for states to modernize their unemployment insurance systems, producing an unprecedented wave of state UI reforms that include the expansion of benefits for low-wage and part-time workers as well as for those who may leave work due to family responsibility conflicts.

But the additional weeks are already running out—according to estimates from the National Employment Law Project, up to 600,000 Americans will have exhausted benefits provided by the Recovery Act by the end of October. And about 1.3 million workers will exhaust their unemployment benefits by the end of this year.

Unemployment benefits are not retroactive. While workers who ran out of benefits will be eligible if Congress passes an extension, they will never be able to recoup the benefits they have lost in the interim, pushing them closer to poverty. Every day of delay in getting The Unemployment Compensation Extension Act to the president’s desk translates into benefits the unemployed will never be able to access.

Helping the unemployed helps all of us. As the unemployed run out of benefits, they are less likely to spend money to stimulate the economy and more vulnerable to foreclose on their homes—both trends that could stall economic recovery. It is critical that Congress put the needs of struggling families first by quickly and decisively extending UI benefits.

Alexandra Cawthorne is a Research Associate at the Center for American Progress. Melissa Boteach is the Half in Ten Manager at the Center for American Progress Action Fund.

For more on this topic, please see:

• Helping the Jobless Helps Us All: The Central Role of Unemployment Insurance in America's Economic Recovery by Maurice Emsellem, Andrew Stettner, Lisa Donner, and Alexandra Cawthorne.