There’s never a good time to be involuntarily unemployed. But today’s conditions are among the worst in decades. For every new job created there are four people looking for work. With supply and demand this out of whack, it is not surprising that the average length of unemployment for a worker who loses his or her job is a little more than 10 months. But in the midst of this troubling scenario, House conservatives are proposing that the government should reduce the length of time people can collect unemployment insurance by 40 weeks.
A recent poll of the long-term unemployed, conducted by National Public Radio and The Kaiser Family Foundation, illustrates how disastrous being out of work in this economy can be, and the lengths people would be willing to go to find a new job:
- Seventy-four percent of the long-term unemployed have a negative outlook on their financial situation, and more than 60 percent are not confident they will be able to find a job that will provide them with the pay and benefits they need to get by.
- Only 22 percent of the long-term unemployed are currently receiving unemployment benefits. Among those who are, a full 94 percent think it is at least somewhat likely that their benefits will run out before they are able to find a new job. These fears are not unfounded. Among those who had previously received unemployment benefits but currently were not, 84 percent stopped getting them because they ran out.
- A majority of the unemployed would be willing to go to great lengths in order to find work. Eighty-seven percent would take an entry-level job in a different field, 68 percent would be willing to take a pay cut from their last job, and 44 percent would be willing to pack up and move to a new state if it meant that they would be able to find employment.
These findings echo what economists have been saying for some time now. The long-term unemployed are desperate to find work, their benefits are running out, and something needs to be done to assist them in this tough economy.
Nonetheless, conservative lawmakers such as Sen. Jon Kyl (R-AZ) have argued that unemployment benefits discourage the unemployed from seeking work “because people are being paid even though they are not working.” This is not only a contradictory statement—because an individual must be actively seeking work in order to qualify for unemployment insurance—but it is also factually inaccurate according to recent research.
Jesse Rothstein, former chief economist at the Department of Labor and current professor of public policy and economics at UC Berkeley, recently released a paper that directly contradicts Sen. Kyl’s assertion. While some researchers have argued that extensions to unemployment insurance have contributed about 2.7 percentage points to the unemployment rate, Rothstein found that extending benefits to unemployed workers only raised the unemployment rate by approximately 0.3 percentage points. Less than half of this tiny effect was because people did not become re-employed, and there’s reason to believe that “the availability of extended benefits might have raised reemployment rates of displaced workers, by keeping them from abandoning their searches prematurely.”
Let’s be clear: Maintaining unemployment insurance doesn’t discourage a worker from finding employment again, and it can help some workers who are currently employed stay that way. Businesses cannot hire new workers unless there is demand for their services. People who are receiving unemployment insurance are more likely to spend the money they receive than save it, which means they are putting money back into local economies and supporting the jobs of their community members. For every $1 paid out in unemployment benefits, the economy grows by $2.
There are currently 13.3 million unemployed people looking for work in the United States, and 7.1 million are receiving unemployment insurance. A reduction in those benefits would not only spell further financial disaster to the individuals directly but would also further dampen the economic recovery of our nation as a whole.
Sarah Jane Glynn is a Policy Analyst at the Center for American Progress.
- Five Reasons to Continue Unemployment Benefits by Heather Boushey and Meghan Miller
- No Time to End Unemployment Benefits by Heather Boushey
- The Importance of Extending Both the Payroll Tax Cut and Emergency Unemployment Benefits: By the Numbers
- Our Economy Needs Help Now by Heather Boushey (The Hill)
- Animation: How Unemployment Insurance Helps the Economy by Heather Boushey
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Sarah Jane Glynn