Tuesday, July 22, 2014





Akron Beacon Journal: Extended benefits necessary


December 10. 2013 11:16PM
The Akron Beacon Journal (MCT)

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Three days after Christmas, more than 39,000 Ohioans will see their federal unemployment benefits expire. The number nationwide is 1.3 million. Thankfully, Congress can act to avoid the cutoff and subsequent hardship. It can extend the jobless benefits until the end of next year. It should do so as a first priority, erasing any uncertainty as the holidays approach.


Last week, the federal government reported that the unemployment rate dropped to 7 percent, reaching a five-year low. Yet, look carefully at the numbers, and the labor market remains troubled. Three-quarters of the decline in the jobless rate the past three months reflects people leaving the work force, no longer looking for employment. Consider that the share of the population with a job has remained below 60 percent for nearly five years. It stood at 58.6 in November, or four percentage points below the level at the onset of the recession.


Another measure is the labor force participation rate. It is lower today than at the start of this year, and just slightly higher than the lowest level in 35 years. All of this points to the ample justification for extending jobless benefits.


Those who lose their jobs first tap state unemployment compensation programs, usually for 26 weeks. Then, the federal government steps into action, approving temporary extensions, the length driven by the severity of an economic downturn. The Great Recession of 2008-2009 delivered a harsh blow, leading to an extension for 99 weeks, since scaled back to 73 weeks.


One distinguishing element of this recession and its fallout is the role of long-term unemployment. Today, 37.3 percent of the 10.9 million unemployed have been looking for work in excess of 27 weeks. Know that the previous high for such long-term unemployment was 26 percent in June 1983. The National Employment Law Project adds that the current rate of long-term unemployment is more than two times higher than when federal emergency benefits were ended during earlier recessions and recoveries.


So, the precedent also exists for an extension. Then, there is another aspect of the weak job market, nearly three unemployed workers for every one job opening.


These aren’t people living easy, receiving an average $269 per week in jobless benefits. Worth stressing is that the compensation generates positive results beyond helping people get by. The Center for Poverty Research has linked unemployment benefits to a 25 percent reduction in child poverty since 2009. The Congressional Budget Office calculates that extending the benefits through 2014 would add 300,000 jobs, the money boosting overall economic activity.


Thus, failing to extend federal jobless benefits wouldn’t just be callous, it would burden the fragile economy, aggravating the primary problem, a stubborn lack of demand.




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