Several days ago, the U.S. House of Representatives approved a tax compromise measure that includes a 13-month reauthorization of the federal unemployment insurance programs. The bill, which passed the Senate Wednesday, was signed into law by President Obama on Friday, December 17th.
After a 16-day lapse of crucial federal benefits, which had expired at the beginning of the holiday season, millions of current and future long-term unemployed workers can breathe a sigh of relief, knowing that benefits will be restored and the program will be in place for the entirety of 2011.
With the reauthorization made retroactive to December 1, 2010, those whose benefits had lapsed will have them restored. And millions of unemployed workers and their families will have the basic security of knowing these benefits are available for between 34 and 73 weeks if needed, beyond the 26 weeks of regular state-funded unemployment insurance. Workers who had already been eligible for additional federal benefits will have those benefits available once more. Those workers who have been receiving regular state benefits will have the security of knowing that extended federal benefits are available to help sustain them during their job searches should they still lack new employment after six months of looking for work.
The legislation also includes significant improvements to the Extended Benefits program, which provides the final 13 to 20 weeks of federally-funded unemployment benefits—thereby averting severe benefit cuts that would have hit nearly half the states with the highest unemployment rates. These states would have dropped off the EB program due to a provision requiring a state’s unemployment rate to have increased over the past two years in order for the state to remain eligible for the program. Currently, 977,000 workers are receiving extended benefits.
The legislation also creates an opportunity for an additional ten states—Arkansas, Iowa, Florida, Louisiana, Maryland, Mississippi, Montana, Oklahoma, Utah, and Wyoming—to add the EB benefit into the support package they offer to jobless workers, if they pass state legislation.
These benefits produce a real stimulus affect since the money is spent on basic needs like housing, food, and clothes. UI benefits are a tremendous benefit to local economies. For every dollar spent on unemployment benefits, two dollars are generated in return to our economy.
Much more is needed to address the jobs crisis, however. Our economy is in deep trouble: We have fewer jobs today than ten years ago, the unemployment rate has remained above nine percent for 19 months, and most recently, unemployment rose while job growth slowed. An economy that is not adding enough new jobs to bring down a 9.8 percent unemployment rate is in need of serious new initiatives to create more good jobs. The fact that a key argument favoring extended unemployment benefits is their significant stimulative effect is indicative of the fragile state of the economic recovery. Moreover, growing numbers of long-term jobless workers are exhausting all available benefits. Policies to help address the needs of those exhausting all benefits need to be pursued alongside effective job-creation and workforce re-entry initiatives.
Our nation faces many serious challenges in the months and years ahead, but none is more vexing or crucial than the question of how we will rebuild an economy with good jobs that restore the promise of opportunity and economic security to working families in every corner of America. Winning the full-year continuation of the federal unemployment insurance programs was an important first step: It will help sustain millions of unemployed job-seekers, give a boost to the economy, and provide the space and time needed to focus on additional efforts to build a sustained jobs recovery.
For more information visit the New York State Department of Labor and Unemployedworkers, a project of the National Employment Law Project.
