Unemployment insurance, or UI, along with the Supplemental Nutrition Assistance Program or SNAP, formerly known as food stamps, stabilize the economy by increasing the demand for basic goods and services. Stabilizing demand remains critical to saving and creating jobs and boosting earnings at this point in the economic recovery.
Job creation
- Unemployment benefits for the long-term unemployed have kept an average of 1.6 million American workers in jobs every quarter during the recession.
- The U.S. Department of Agriculture estimates that $1 billion in food stamps creates between 8,900 and 17,900 full-time jobs.
Growing the economy
- Since the recession began every dollar spent on benefits for unemployed has grown the economy by $2.00, and every dollar spent on food stamps grew the economy by approximately $1.79.
- Unemployment insurance benefits reduced the fall in gross domestic product by 18.3 percent, which meant that nominal GDP was $175 billion larger in 2009 than it would have been without these benefits.
- UI benefits have increased GDP by $315 billion overall from the start of the recession through the second quarter of 2010.
- Pulling benefits for the unemployed out of the economy would remove 0.7 percent of total U.S. personal income. Over the course of the recession, total personal income fell by 1.6 percent. This means that discontinuing long-term UI would produce an impact that is nearly half as large as the recession’s total impact on personal income.
This Congress should stand up for American workers and reject the idea that what our economy needs is a dose of austerity. Extending unemployment insurance benefits to the long-term unemployed boosts demand and generates jobs, which helps us all. In the process, we do right by the Americans hit hardest by the recession.
For more on this topic please see: