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Deborah Weinstein

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Unemployment Insurance Expires for 1.3 Million: Will Congress Act to Undo the Damage?

Posted: 12/27/2013 1:41 pm

Unemployment Line
Yellow Dog Productions via Getty Images

Mary Lowe of Ironton, Ohio, was laid off in February 2013 -- the first time in 31 years she hadn't been working. She's had years of experience in health care and restaurant administration, and now looks for work pretty much every day. She has interviewed for jobs paying only $10 an hour, and doesn't get those because she's deemed "overqualified."

Ms. Lowe described her federal Emergency Unemployment Compensation benefits of $325 a week as a lifeline for her family. Their daughter Sophie will turn three in February. Her husband, who had sold his music business, had a stroke a few weeks ago. Her unemployment check is the only source of income right now that has allowed them to keep the home they saved for 10 years to purchase. But she is losing that income after December 28 because Congress failed to renew the federal unemployment insurance program (UI) before it left for the holiday recess.

Mary Lowe spoke during a press conference call that included women House members, including former Speaker Nancy Pelosi (D-CA), Rosa DeLauro (D-CT), Tammy Duckworth (D-IL), Suzanne Bonamici (D-OR), and Jan Schakowsky (D-IL). They were calling for Congress to fix this miserable lapse when they return in January. Ms. Lowe identified herself as a registered Republican, and she has been in touch with her representative, Bill Johnson (R-OH) and Speaker John Boehner, also from her state. She can't believe the "callous indifference" of lawmakers to leave without renewing unemployment insurance. Me either.

It's worth noting that Congress failed to act despite at least some bipartisan support for continuing the benefits. Senate lead budget negotiator Chairwoman Patty Murray (D-WA) spoke for her party's position by including UI in her budget proposal, which was rejected by House Budget Chairman Paul Ryan (R-WI), acting in accord with the House leadership. An attempt to add a temporary renewal of UI to the budget deal was defeated strictly along party lines in the House Rules Committee. But a letter was sent to Speaker Boehner by Rep. Chris Gibson (R-NY) and six other House Republicans calling for the program's extension, and on the Senate side, Senator Dean Heller (R-NV) co-sponsored a bill to renew UI.

Does this mean that there is some hope unemployment insurance could be restored for Mary Lowe and the 1.3 million people whose benefits will abruptly end shortly after Christmas? The holidays and the promise of a new year ought to be a time to keep hope alive, and if all the jobless people and their families made a stink to their congressional delegations, hope would perk right up. But let's face it: these families are in a state of crisis. They're struggling to find a job, any job. They've run through savings, may have had to move in with relatives, and are suffering over having to say "no" over and over again to their children at Christmas. Many will be too distracted and troubled to contact their representative and senators.

The question is, when we all have our own more pleasant holiday distractions, will we take the trouble to stand with the jobless by speaking out to Congress?

Here are five reasons why you should:

1. There are still three people looking for work for every open job. That's an average - of course, the job market is even worse in many communities. Some employers discriminate against the unemployed in their hiring decisions. The longer you've been out of work, the tougher it gets, even if you're highly qualified.

2. Unemployment insurance keeps people in the labor force, looking for work. Opponents of extending UI, like Senator Rand Paul (R-KY), say it's a "disservice" to workers because it keeps them from having to take a job. In fact, research shows that people receiving unemployment insurance are more likely to keep up an active job search than those who don't get it. For one thing, it's required to receive benefits. Twenty years of research, as summarized by the Council of Economic Advisers, shows that, and also finds people receiving benefits stay out of work no more than a week more than others, which enables them to hold out for a better-paying job more in line with their skills and experience.

3. Unemployment insurance keeps children and families out of poverty, but cutbacks have already reduced its effectiveness. In 2012, 2.5 million people were kept out of poverty by UI benefits, including 446,000 children, using a more modern Census Bureau poverty measure. But because the number of weeks of assistance has already declined by more than one-third and increasing numbers of the jobless have run out of all benefits, the anti-poverty protections of UI have shrunk substantially. In 2010, 3.2 million were lifted out of poverty by UI, according to the Center on Budget and Policy Priorities -- nearly twice the number in 2012. Completely eliminating federal benefits for the long-term unemployed will make things worse.

4. Terminating federal unemployment insurance will cost jobs. When unemployed people have at least some money to spend, the whole economy benefits. The Congressional Budget Office and other respected economists have long shown that UI increases are one of the most effective ways to boost the economy. The U.S. Department of Labor estimates that extending Emergency Unemployment Compensation through 2014 will save 240,000 jobs. If we don't renew EUC, those jobs won't be saved. In Mary Lowe's state of Ohio, that's more than 6,500 lost jobs. In Florida, more than 10,000 jobs; in Pennsylvania, more than 15,000 -- well, you get the idea.

5.Kicking people when they're down is nasty and needless. Not only have the weeks of unemployment insurance been cut way down (see reason 3), the automatic cuts in effect this year reduced average benefits by $43 a week, down to a meager $289 (the national average). But while Congress has allowed first, the reduction, and now, the elimination of UI, they have done nothing to close tax loopholes benefiting the rich worth hundreds of billions of dollars. Just one example: Corporations can take wildly exaggerated tax deductions on the value of the stock options they pay out, said to cost the taxpayers about $23 billion a year. That's about what keeping federal UI in 2014 would cost.

If this makes you mad, you're not alone. A recent poll found that a substantial majority of voters want to maintain rather than end UI (55 percent versus 34 percent). But Congress pays most attention to the people who feel strongly enough to contact them. So before you do your next holiday thing, let Congress know how you feel.

 
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