The holiday shopping season is upon us, early as it is. But I doubt many jobless workers and their families will be stuffing their shopping bags with wished-for gifts.
And a third of the more fortunate will lose their benefits just three days after Christmas unless Congress renews the Emergency Unemployment Compensation program, the National Employment Law Project warns.
An additional 850,000 or so workers will exhaust their regular state UI benefits by the end of March and have no EUC to turn to. The number could swell to 4.8 million by the end of 2014, says the top economist at the White House.
If past is prologue, nearly half the workers who receive state UI benefits will still be jobless when they come to end of the weeks their state’s program covers — 26 in most states, but considerably fewer in some.
The benefits are far from generous — on average, $269 a week. But UI benefits generally were enough to keep 2.4 million people out of poverty last year, before sequestration took a bite out of EUC.
Forecasters for the Federal Reserve Bank of Philadelphia expect the rate next year to average out at 7.1%. Today, it’s 8% or higher in 16 states and the District of Columbia. So it’s hardly time to pull the plug.
More importantly, as the Economic Policy Institute argues, the job market is scarcely better than it was a year ago, when you look at the number of job openings in light of the number of job seekers.
The unemployment rate is lower mainly because people have given up looking or decided not to start because the odds of finding a job are about one in three.
Some of the nearly 6.1 million “missing workers,” i.e. those who’d be employed or looking if the labor market were healthy, may be getting education or training credentials that will improve their unemployment prospects.
But, as the Urban Institute says, other stay-outs and drop-outs, especially those who are older, may have a hard time getting work even when there’s more available. A harder time, of course, if there isn’t.
EPI figures that extending the EUC program would create and/or preserve an estimated 310,000 jobs because long-term jobless workers, most of whom are “cash-strapped,” will spend their money on basic necessities.
The money that would flow to local businesses would support not only jobs there, but in the businesses that serve and supply them. So we’d have their workers paying taxes — and more tax revenues from the businesses too.
A large portion of the cost of extending the EUC program would thus be offset by the revenues, plus some savings in other safety net programs.
Contrariwise, failure to extend it would put a damper on our already anemic economic growth and (horrors!) perhaps slow the decline in the short-term deficit.
And all to save an effective $11.1 billion — 0.3% of next year’s federal budget, according to the nifty calculator the Center for Economic and Policy Research provides.
Democrats in Congress reportedly hope to fold an EUC extension into the deal that’s currently being negotiated to prevent another government shutdown, while also replacing — or at least, easing — the cuts forced by sequestration.
House Republicans apparently want no such thing — or so a highly inflammatory post on the Ways and Means Committee site indicates.
Politico, however, reports that Republicans on the budget conference committee “would consider” adding an EUC extension “as a bargaining chip.” Also that the chances of a bipartisan deal are maybe a bit better than 50-50.
So we could be looking at another of those last-minute kick-the-can-down-the-road deals. What that would mean for the EUC program is a question mark.
But, as George Zornick at The Nation observes, “many past renewals have happened during crisis standoffs.” The next, should it materialize, would come to a head in mid-January.
It would be ever so much better for all concerned if Congress delivered balanced relief from sequestration — and relief for long-term jobless workers — well before Christmas.