House vote will hurt millions of unemployed workers
Turning their backs on millions of unemployed workers who can’t make ends meet without the help of their unemployment insurance (UI) benefits, 229 Republican House members voted not to renew federal emergency benefits for the long-term unemployed. In a bipartisan vote, the Senate had agreed to continue the emergency benefits until the end of February, along with an extension of the payroll tax cut that expires at the end of December. But the House refused to consider that bill yesterday, killing hopes for the unemployed as winter begins.
What does the House vote mean for the unemployed?
Regular state UI benefits generally last no more than 26 weeks. The average benefit is less than $300 a week, but an individual’s benefit varies depending on previous earnings and state law. The maximum state-provided benefit currently ranges from $235 in Mississippi to $629 ($943 with dependents) in Massachusetts.
The federal legislation the House was voting on provides up to 73 weeks of additional benefits; workers in any state who exhaust their regular UI benefits before they can find a job can receive up to 34 additional weeks of benefits through the temporary federal Emergency Unemployment Compensation (EUC) program enacted in 2008. That number rises to 53 weeks in states with especially high unemployment rates. Workers who exhaust both their regular UI and EUC benefits can receive up to 20 additional weeks of benefits through the Extended Benefits (EB) program.
The House vote will terminate all of the additional federal weekly unemployment insurance benefits, as of Jan. 3, 2012. For more than 400,000 workers who will exhaust all of their regular state benefits in January, there will be no more federal help; their benefits will be cut off. More workers will exhaust benefits in February and each succeeding month, and all of them – millions of workers — will be denied any federal benefits.
Nearly 600,000 very long-term unemployed workers who are currently receiving Extended Benefits will lose those benefits in January 2012 because their states will end their EB program when full federal funding expires.
More than 3 million workers are currently receiving EUC. Most of them will lose those benefits prematurely if the legislation is not renewed. EUC provides benefits in “tiers” of weeks; people receiving EUC as of Jan. 3, 2012 will be allowed to complete their current tier but not move on to the next tier. The National Employment Law Project estimates that over 700,000 workers will reach the end of their current tier and thus receive no further federal benefits in January. Many more will lose EUC benefits prematurely in the months to follow.
Altogether, the Department of Labor estimates that about 2.5 million workers will lose benefits by March 3, 2012, and 5 million by year’s end, if federal benefits are not renewed.
Although the economy has improved since the depths of the recession, by any measure, the labor market is very poor, and jobless workers face terrible challenges. A recent report by the Council of Economic Advisers makes clear that the jobless are not to blame for their situation; the fault lies with the economy:
As of November 2011, the unemployment rate stood at 8.6 percent and 5.7 million workers had been out of work for more than 26 weeks; the average duration of unemployment was 40.9 weeks. In October, the latest month for which job vacancy data are available, there were more than four job seekers per job opening (versus 1.5 pre-recession). Estimates based on flow data from the Bureau of Labor Statistics monthly Current Population Survey (CPS) show that the probability that an unemployed worker finds a job in any given month is roughly 17 percent. For those who have been unemployed for more than 26 weeks, the monthly job-finding rate is closer to 10 percent.
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