Unemployment Benefits Extension Advances

AFL CIO for AFL-CIO April 18, 2008

More than 200,000 jobless workers a month run out of unemployment insurance (UI) benefits without finding new jobs. Some 3.5 million unemployed workers are expected to exhaust their benefits this year.

That’s six months without work or prospects for a new job in an economy that is shedding jobs and on a downward spiral that most economists say isn’t even close to bottoming out.

Yesterday, the U.S. House Ways and Means Committee took the first step to helping the long-term jobless when it passed a bill (H.R. 5749) to provide an additional 13 weeks of UI benefits for jobless workers in every state and an additional 13 weeks to those in states with high unemployment rates. Says Rep. Jim McDermott (D-Wash.), co-sponsor of the bill, along with Rep. Phil English (R-Pa.):

The economy is in trouble, the American people are in trouble; and we intend to help. If ever there was a time when the American people expected action out of Congress, this is it….Finding a decent job becomes harder and harder as more jobs are shed.

Earlier this year, the AFL-CIO urged Congress to include a UI extension in an economic stimulus package, but it was dropped from the legislation after President Bush said he would veto the bill if it included an extension. In a letter this week to the Ways and Means Committee, AFL-CIO Government Affairs Director Bill Samuel wrote:

There are currently 1.3 million workers—or 17.5 percent of all unemployed workers—who have been jobless for more than six months….The long-term unemployment rate is already much higher than it was at the beginning of the 2001 and 1990-1991 recessions, and is the same as when Congress extended benefits during the last two recessions….

…There is now one job available for every two (1.93) people actively seeking work. Payrolls contracted for the third month in a row in March—the largest job loss in five years—and the number of private-sector jobs has fallen 300,000 since November.

The official numbers may not reflect the real number of unemployed. Rep. Bill Pascrell (D-N.J) says the rate does not include the jobless who are not receiving unemployment benefits or those who have exhausted their benefits. Pascrell says a Ways and Means Committee report puts the unemployment rate at 9 percent, if those jobless workers are included.

Extending UI benefits not only provides help to jobless workers, it gives the economy a needed boost. Last week at a Ways and Means subcommittee hearing on the bill, Maurice Emsellem, policy co-director for the National Employment Law Project (NELP), said:

Extended jobless benefits immediately boost the economy (by a factor of $2.15 for every dollar of benefits circulating), while also providing targeted relief to struggling homeowners and those communities hardest hit by the foreclosure crisis.

Congress now has a fundamental choice that will significantly influence the nation’s economy and these struggling families—whether to further delay extending jobless benefits, thus causing more economic hardship, or act now to provide the economic boost that the unemployment system was intended to deliver to prevent a more serious economic downturn.

Samuel urged Congress to act quickly and bring the bill to a full vote before the House and Senate. Both Democratic presidential candidates, Sens. Hillary Rodham Clinton (D-N.Y) and Barack Obama (D-Ill.), support extending UI benefits. Republican presidential candidate Sen. John McCain’s (R-Ariz.) economic agenda released this week ignores the jobless in favor of lending a hand to corporations.

Here is how the Washington Post described McCain’s plan in a news story headlined, “McCain’s Plan for Working Class Offers Plenty for Corporate World”:

Sen. John McCain yesterday offered sweeping rhetoric about the economic plight of working-class Americans, promising immediate assistance even as he spelled out a tax and spending agenda whose benefits are aimed squarely at spurring corporate growth.

In a speech billed as the most comprehensive summary of McCain’s economic vision to date, the candidate proposed to eliminate the alternative minimum tax, slash corporate income tax rates and offer a grab bag of other business breaks.