Unemployment Benefits Boosted Economy, Saved Millions Of Jobs, Says Labor Department

WASHINGTON -- The extra weeks of unemployment insurance created in 2008 and 2009 to fight the recession significantly boosted the economy and saved millions of jobs, according to a study commissioned by the Labor Department.

"Unemployment insurance is one of the best investments we can make, not only for the millions of people that utilize UI benefits to provide for their families in a time of need, but for the millions more whose jobs are kept secure because of the stabilizing effect it has on our economy as a whole," said Labor Secretary Hilda Solis in a statement.

Most economists agree that unemployment benefits are among the most economically stimulative fiscal policies, because people receiving a few hundred dollars in benefits per week tend to spend the money immediately on necessities like food and rent. During every recession since the 1950s, Congress has given the unemployed additional weeks of benefits beyond the 26 provided by states. During the current recession the long-term unemployed have been eligible for as much as 99 weeks of aid -- though the extra help currently hangs in the balance.

The Labor Department's study, conducted by IMPAQ International and the Urban Institute, found that every dollar spent on unemployment benefits increased economic activity by two dollars, and that the extended benefits kept 1.6 million people on the job and averted 1.8 million layoffs each quarter. The study also found that extended unemployment insurance prevented an 18 percent fall in Gross Domestic Product.

The progressive Economic Policy Institute estimates that reauthorizing the benefits for another full year will cost $65 billion and create more than 700,000 jobs. The Obama administration has called on Congress to reauthorize the benefits.

If it doesn't, the Labor Department estimates that two million long-term jobless will face an abrupt cut-off by the end of the year. "While the economy and the job market are on the road to recovery, the loss of consumer sales from removing billions of dollars in unemployment benefits will set us back," said Solis. "Now is not the time to turn our backs on the families that rely on these benefits and the businesses that serve them."

Click HERE to get a copy of the new report.

Comments

[Paul Sta]

08:20 PM on 11/18/2010

The final vote was 258-154, ordinarily sufficient to pass legislation. But DEMOCRATS brought the measure to the floor using a legislative tactic that required approval from two-thirds of the House

I suspect the Democrats, used the measure as a political tool, to smear Republicans at the expense of the 2 million unemployed.

Tell me i'm wrong, WHY REQUIRE A two- thirds majority??????

[BookmanIIII]

06:55 PM on 11/18/2010

President Reagan was not all that sympathetic with the unemployed of his era. In fact, his suggestion was McDonalds jobs or selling cemetery plots...His reaction to unemployment stands in lock-step with today's Republicans.

[MaryKayMan]

08:26 PM on 11/17/2010

"For this particular recession, the UI program has provided stronger stabilization of real output than in many past recessions."

Last line of that report.

This is one of the best things that we could do for our economy.

http://www.youtube.com/watch?v=6TTO0ooKGE0

[tjbv]

04:20 AM on 11/17/2010

Good post-- Thanks again, Mr. Delaney, for following this subject so tenaciously once more.

[TMMA]

12:42 AM on 11/17/2010

The unemployed are being discriminated against when it comes to getting hired and that's a well documented fact, yet our gov't sees fit to ignore that small detail.

On job applications, it is not uncommon to see the question "Have you ever been LAID OFF from a job?” Not fired (which has always been the norm) but LAID OFF!

I'll bet you they are not asking that question so they are sure to hire those folks first.

[1donewrong]

10:53 PM on 11/16/2010

The war's in Afghanistan and Iraq created/saved 40 million new jobs to get us out of the Clinton recession ala FDR

[Mildmannered]

10:13 PM on 11/16/2010

Aren't we down now from six applicants for every job opening to five applicants.

[maigrey]

05:26 AM on 11/17/2010

ah irony...

[rainkitty]

09:48 PM on 11/16/2010

Where the jobs go:
When corporations shrink their work force and send jobs abroad, job losses cascade down the supply chain.
http://www.mcclatchydc.com/2010/11/11/103600/middle-class-downsizes-as-its.html

[Mildmannered]

10:13 PM on 11/16/2010

co-sign and fanned

[Fiona54]

07:31 PM on 11/16/2010

I find it entirely ironic that the "two million unemployed" are the only ones who seem to be worth saving. The "over six million unemployed - 99ers" are in far worse straights and nothing is done to help and what is worse - they are being ignored by Congress completely. Talk about lack of real focus on the economy. They don't have a clue or simply do not care.

[leoluminary]

07:54 PM on 11/16/2010

I hear ya'... My unemployment expired in August ...still searching for work...have $14 left. And thanks to a kind friend, I still have internet access for another month.

[Mildmannered]

10:15 PM on 11/16/2010

best of luck

(try doing lots of volunteer work to make contacts and network)

[Adartist777]

10:06 PM on 11/16/2010

As a 99er, I've been finding some occasional day work, but that's about it. Nothing steady or with health benefits. Not even 40 hours. You're lucky to get twenty hours a week. That's a good week.

[jan1760]

06:52 PM on 11/16/2010

Did you expect them to say anything different?
"I am for doing good to the poor, but...I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed...that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer."
— Benjamin Franklin

[doctor4kids]

07:33 PM on 11/16/2010

So what do you propose we do?

Franklin lived in a time where there were miles and miles of virgin forests just waiting to be cleared. The average person didn't need much of an education; he really could make a living by the sweat of his brow. I'm not so sure that's true today.

[tulsey]

07:45 PM on 11/16/2010

You beat me to it.

[tulsey]

07:43 PM on 11/16/2010

Franklin owned slaves. In his day there were native Americans and resource frontiers to exploit. Where would you lead or DRIVE the current less fortunate to?

[MrBadExample]

05:58 PM on 11/16/2010

The bulk of the people reading this know what happens next. With no extension of unemployment benefits and no stimulus (thanks to the incoming red tide), there will be no Plan B when employers still aren't hiring in January when the new Congress is sworn in.

Expect at the very least a foreclosure tsunami and a bankruptcy cyclone--people were scraping by with UI and COBRA, but there's a virtual guarantee that the House and Senate will deadlock and no new emergency measures will be taken. This mess has dragged on three years from the first hiccup in job numbers in August 2007, and nobody has a clue how to end it. But it's clear that the people who expected the Pols to care have been profoundly deceived.

[Cheryl2]

08:53 PM on 11/16/2010

Plan B is more tax cuts to the rich and corporations. Bet on it.

[JackDermand]

05:57 PM on 11/16/2010

CALL THESE SENATORS! TELL THEM TO VOTE YES TO EMERGENCY UNEMPLOYMENT EXTENSIONS! DON'T LET THEM CUT OFF MILLIONS OF MEN, WOMAN AND CHILDREN DURING THE HOLIDAYS! CALL NOW!

Brown, Scott P. - (R - MA) Class I
317 RUSSELL SENATE OFFICE BUILDING WASHINGTON DC 20510
[phone]
Web Form: scottbrown.senate.gov/public/index.cfm/emailscottbrown

Collins, Susan M. - (R - ME) Class II
413 DIRKSEN SENATE OFFICE BUILDING WASHINGTON DC 20510
[phone]
Web Form: collins.senate.gov/public/continue.cfm?FuseAction=Contact...

Snowe, Olympia J. - (R - ME) Class I
154 RUSSELL SENATE OFFICE BUILDING WASHINGTON DC 20510
[phone]
Web Form: snowe.senate.gov/public/index.cfm?FuseAction=ContactSenat...

Voinovich, George V. - (R - OH) Class III
524 HART SENATE OFFICE BUILDING WASHINGTON DC 20510
[phone]
Web Form: voinovich.senate.gov/public/index.cfm?FuseAction=Contact....

McConnell, Mitch - (R - KY) Class II
361A RUSSELL SENATE OFFICE BUILDING WASHINGTON DC 20510
[phone]
Web Form: www.mcconnell.senate.gov/public/index.cfm?p=contact

Reid, Harry - (D - NV) Class III
522 HART SENATE OFFICE BUILDING WASHINGTON DC 20510
[phone]
Web Form: reid.senate.gov/contact/index.cfm

[missygoose]

06:40 PM on 11/16/2010

None of them care, so I'm not wasting the precious few minutes I have left on my phone.

[Reno Fickler]

05:39 PM on 11/16/2010

If UI is so good, why don't you fire everybody?
How can extending the length of someone's unemployment create a job? And even if it did, did you hire the unemployed man to fill the position? Then why isn't unemployment going down?

[Algonquin]

05:44 PM on 11/16/2010

If being on unemployment is so great, why isn't everybody on it?

[llstudent]

06:28 PM on 11/16/2010

who the f wants to be on it, God you repubs are so caring and jesus like, I cannot believe it, sad.

[tulsey]

07:49 PM on 11/16/2010

The top 2% are.

[Tanishh]

06:21 PM on 11/16/2010

So making a fraction of what you used to while you try to explain to family and friends why you stay home most of the time is preferable to being proud of what you do and making way more.

Also, increasing demand in the economy by providing money to those who will spend all of it does not create or save jobs.

Also, there being 1 job per 5 unemployed is not why people are unemployed.

This is what Republicans actually believe.

[jcarterla]

05:16 PM on 11/16/2010

This is not surprising. UI is the best way to keep our country from total collapse. If all the greedy heartless people would realize this, life would be a lot better. Tax cuts don't help. The rich will never and have never trickled their extra money down. They put it in the cayman islands. If you are middle class or poor, the republican's plan will only move you down the ladder.

[missygoose]

06:44 PM on 11/16/2010

The problem is the greedy and heartless aren't actually people, they're just machines programmed to think only of themselves. They're called sociopaths. Or in layman's terms, Republicans.

[jcarterla]

06:49 PM on 11/16/2010

To be fair, I have know several liberal sociopaths. Many who have leaned on me in the past and are nowhere to be seen now that I'm in dire straights.

[Paul Sta]

04:58 PM on 11/16/2010

Only 65 billion to extend benefits for a year, get back our money from QE2, and extend it for 10 years!!

Its will do more to stimulate the economy than Obamas stimulus plan.