Dismal Jobs Figures Highlight Need to Continue Federal Jobless Benefits
It’s too soon to allow the federal unemployment benefits program to end at the end of the year, as will happen unless Congress acts to extend it. Federal unemployment benefits provide a boost to the economy, by putting money in the pockets of people who will spend it right away. These benefits act as a lifeline for families struggling in an economy that has only one job opening for every four people looking for work.
Re-authorizing federal unemployment benefits is important not just for the national as a whole, but for Wisconsin in particular. Job growth in Wisconsin has been slower than anyone wants, and recent jobs figures in Wisconsin are downright grim. Between July and October 2011, Wisconsin lost 21,200 jobs – about as many jobs as there are in all of Douglas County. Over the last year, the national unemployment rate has slowly declined, but Wisconsin’s hasn’t budged.
Right now, Wisconsinites have access to a total of up to 86 weeks of jobless benefits – 26 weeks of state-funded benefits and 60 weeks of federal benefits. If Congress does not re-authorize federal unemployment benefits, the duration of benefits will be cut back to 26 weeks, shorting the period of benefits by more than a year.
Another critically important boost to the economy – the payroll tax cut – is slated to expire at the end of the year as well, unless Congress acts to extend it. Here’s how Chuck Marr at the Center for Budget and Policy Priorities describes the likely effects of failure to continue these programs:
“Up and down Wall Street, economists are warning about the severe consequences of inaction on payroll taxes and extended unemployment benefits. Goldman Sachs estimates that expiration of the payroll tax cut would reduce growth by as much as two-thirds of a percentage point in early 2012. Moody’s Mark Zandi adds that if Congress does not extend the payroll tax holiday and unemployment benefits for 2012, ‘there will be approximately one million fewer jobs by year’s end.’”
Some had hoped that the Supercommittee could agree to extend unemployment benefits and the payroll tax cut as part of a larger package. Since those negotiations have been unsuccessful, Congress needs to act before the end of the year to continue federal unemployment benefits and the payroll tax cut – or we risk a shrinking economy and smaller paychecks in 2012.