Fate of the Federal Lifeline for Long-term Job-seekers Still Uncertain
Ten U.S. Senators announced today that they have reached a deal for restoring federal unemployment benefits for about 2 million people who have lost those benefits since the end of 2013. The compromise would extend the expired program through the end of May, and would make the restored benefits retroactive to the beginning of the year. That would be very welcome new for many jobless workers and their families who are struggling with one of the harshest winters in decades. The deal appears to have at least 60 votes, which would make it immune from the filibusters that have stymied other efforts in the Senate to restore the federal lifeline for the long-term unemployed. Although the prospects for passage in the Senate now look very good, its chances in the House are unclear. Some House conservatives quickly condemned Read more the bill today.
Unemployment of Six Months or More Climbs by 203,000 in February
The new employment numbers released Friday provide further evidence of the need to restore the federal Emergency Unemployment Compensation (EUC) program for the long-term unemployed. Although there was a little bit of positive news relating to total employment levels, the new data illustrate that the modest job growth has not eased the crisis facing the long-term unemployed. For example:
- the total number of jobless workers who have been unemployed for at least six months grew significantly in February, climbing by 203,000 to 3.8 million people;
- the unemployment rate ticked up to 6.7%; and
- the labor force participation rate is one-half a percentage point below where it was one year ago.
Federal unemployment benefits for people who have been unemployed more than six months were cut off at the end of December. One argument made by the supporters of that decision is that eliminating the EUC program would reduce the jobless rate by giving the unemployed increased incentive to find work. Read more
Congress has failed to extend federal emergency jobless benefits, harming tens of thousands of jobless workers in Wisconsin and the businesses that depend on them as customers. Since federal benefits were abruptly cut off at the end of 2013, 35,000 jobless workers in Wisconsin have been cut off or denied access to federal unemployment benefits so far.
Congress has failed to extend federal emergency jobless benefits, harming jobless workers, businesses, and local economies in Wisconsin. The abrupt end of these benefits also harms many Wisconsin children with parents who have been out of work a long time.
Extended benefits under the federal Emergency Unemployment Compensation program ended abruptly at the end of December, reducing the maximum number of weeks of unemployment benefits in Wisconsin from 54 weeks to 26 weeks. Discussions about extending benefits are underway in the Senate Read more , although it is unclear whether lawmakers can agree on whether the cost of re-authorizing extended benefits needs to be offset by cuts in other programs. Senate Republicans have also indicated they are interested in tying an extension of emergency benefits to priorities such as building the Keystone XL oil pipeline and opening energy exploration on federal land.Children of parents who have been out of work a long time are among the people hurt by the inability of Congress to come to an agreement.
Federal Lifeline for the Unemployed Ends Dec. 28th, but the Debate Will Continue
Federally funded unemployment insurance benefits, known as emergency unemployment compensation (EUC), will expire at the end of this week. However, the debate on this issue will continue into 2014, as Senate Democrats seek an opportunity to restore the EUC program. (See, for example, this article about Senator Reed’s proposal.) Here are ten key things to know about the EUC program, which expires on December 28: 1) The maximum length of unemployment insurance benefits will immediately drop to the 26 weeks of state benefits, which is slightly less than half the current limit in Wisconsin of 54 weeks of combined state and federal benefits. (That has already been reduced from a maximum of 99 weeks during the worst of the recession.) 2) There are 1.3 million long-term unemployed workers across the country who will lose this lifeline next week, including about 23,700 jobless workers in Wisconsin Read more .
If Congress does not act, jobless workers in every Wisconsin county will miss out on federal support targeted at helping individuals who have been searching for a job for a long time, according to a new analysis from the Wisconsin Budget Project.
At the end of the year, federal unemployment benefits are slated to end. The result is that 99,000 unemployed Wisconsin residents will lose an estimated $361 million in assistance in 2014.Today’s new Wisconsin Budget Project analysis shows the economic downside to ending federal unemployment benefits, with estimates that describe how jobless workers in each county would be affected. Here are some examples:
- In Milwaukee County alone, nearly 26,000 individuals who have been searching for a long time will miss out on $93.8 million worth of assistance for the long-term unemployed, unless Congress acts;
- In Marathon County, 2,800 individuals will miss out on $10.1 million in assistance; and
- In Fond du Lac County, 1,500 workers will lose out on $5.4 million in assistance.
Negotiators in Congress announced this afternoon that they have reached a tentative agreement on the parameters of a budget compromise that would make modest reductions in the sequester cuts for fiscal years 2014 and 2015. The reductions in some of the across-the-board cuts will be more than offset by other cuts, such as reduced funding for retirement benefits of new federal employees, as well as increases in some fees, such as airline ticket fees, thereby slowing growth in the federal deficit.
As others have noted, this definitely isn’t the sort of “grand bargain” that some lawmakers may have hoped for. In addition, it isn’t certain that the votes will be there to pass this modest compromise. Some conservative groups are urging Republicans to vote no, and some Democrats are very reluctant to vote for a compromise that doesn’t extend the expiring federal Emergency Unemployment Compensation benefits Read more , which provide assistance for workers who have been unemployed at least six months.
Thousands of out-of-work Wisconsinites who have been searching for a job for a long time will lose their unemployment benefits at the end of the year, unless Congress acts to renew federal unemployment benefits. According to a new analysis from the Wisconsin Budget Project, 65,500 jobless workers in Wisconsin will lose access to federal benefits over the next six months, as shown in the chart below.
Most states pay unemployment insurance benefits to jobless workers for a maximum of 26 weeks. In times of higher unemployment, Congress authorizes federally-funded benefits that provide assistance to people who reach the limit on their state-financed unemployment insurance. If the program that provides federal unemployment benefits is allowed to end, the maximum duration of unemployment benefits for jobless workers in Wisconsin will drop by more than half, from 54 weeks to 26 weeks.The Budget Project’s analysis Read more notes that 36 percent of jobless workers have been unemployed six months or more, which is far above the rate of long-term unemployment in previous recessions.
Today’s job numbers show little improvement in long-term unemployment
Unemployment benefits kept nearly two million people out of poverty last year, but that number has declined dramatically in recent years as policymakers have curtailed benefits available for unemployed workers, according to a recent report from the Center on Budget and Policy Priorities Read more . And it will fall much more dramatically in January if Congress does not renew the federal extended benefits for the long-term unemployed.In 2012, unemployment benefits lifted 1.7 million people above the federal poverty line, down from 3.2 million people in 2010, as shown in the chart below. Part of that decline in the number of people kept out of poverty stems from the fact that fewer workers are unemployed and therefore receiving unemployment benefits, but a much larger portion of the decline stems from the fact that fewer workers that are unemployed are receiving benefits. According to the report, the number of UI (Unemployment Insurance) recipients for every 100 unemployed workers fell from 67 in 2010 to 48 in 2012.
A Significant Economic Hit to the National Economy and a Gradually Expanding Erosion of Key Programs
Economists expect the federal government shutdown to have significant adverse consequences for the national economy. This LA Times article Read more reports that some project that even just a two-week partial shutdown will cause a reduction of 0.3 to 0.4 of a percentage point from national economic growth in the fourth quarter. That’s particularly a problem when the economic recovery is already so sluggish that job growth has been barely keeping ahead of population growth. I worry about those economic consequences, but I am also very concerned about the effects of the shutdown on children and families in our state – especially for low-income and vulnerable families. Fortunately, most federally funded programs for those families will continue at least through October, but the consequences could be very serious for vulnerable families if the shutdown lasts well into the fall.