Congress can redress a serious problem that it created last month by quickly enacting legislation, from Senators Jack Reed (D-RI) and Dean Heller (R-NV), to provide a retroactive three-month extension of the Emergency Unemployment Compensation (EUC) program and using the time to craft a solution for the rest of the year.
When Congress failed the long-term unemployed by leaving for its holiday recess without renewing EUC, an estimated 1.3 million people who have been looking for work for over six months saw their unemployment insurance (UI) benefits end abruptly after Christmas week -- and the economic recovery lost a valuable source of purchasing power.
- EUC is a temporary program, but economic conditions have not yet improved enough to end it. EUC, like the federal emergency UI programs enacted in every major recession since the late 1950s, is a temporary program that provides additional weeks of UI to qualifying jobless workers during periods when jobs are hard to find. While labor market conditions are significantly better than in the depths of the Great Recession in 2008-09, they remain significantly worse than they were when policymakers ended previous programs. In particular:
In a robust jobs recovery, the unemployment rate falls quickly and the share of the population with a job (the employment-population ratio, or employment rate) rises. Not this time, as these charts show.
At 2.6 percent, the long-term unemployment rate is at least twice as high as when any of the emergency federal UI programs that policymakers enacted in each of the previous seven major recessions expired, as the chart below shows.