A Lifeline Just Ran Out For 1.3 Million Unemployed People

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"A Lifeline Just Ran Out For 1.3 Million Unemployed People"

Unemployment Benefits

CREDIT: AP

On Saturday, federal unemployment benefits for the long-term unemployed will expire, leaving 1.3 million people without the support they’ve been relying on as they have searched for new work for about six months or longer.

The federal program kicked in for those who exhausted their state-level benefits, which usually run out at around 26 weeks. But Congress failed to reauthorize the program before the end of the year, as it has 11 times since it was first enacted in June 2008 under President George W. Bush, so those benefits have run out. Another 850,000 workers who will exhaust their state benefits and would have turned to the federal program in the next three months will also be left without support. In total, more than 4 million people have been out of a job for more than 27 weeks, making up nearly 40 percent of all the unemployed.

The lapse in benefits leaves people like Lillian Humphrey, who has relied on the benefits since May to pay her bills after osteoporosis left her unable to do the heavy lifting required by her job, facing choices like tapping into Social Security early to get by. People like Alan may have to give up on pursuing training for a new and more promising career. And those like John De Marchi, who spent six years training and three years working to get into the field of 3-D design, will have to take whatever job they can and derail their current careers.

Research backs up their stories, as it shows that those who receive unemployment benefits work harder to find a new job than those who don’t. On the other hand, a failure to get benefits means that the typical family will see its income drop by about 16 percent and it will spend 22 percent less on food. The program also benefits the economy broadly beyond the individual impacts. With Saturday’s lapse, GDP growth could drop by 0.2 to 0.4 percentage points and the economy could lose out on as many as 240,000 jobs. The government will also likely have to spend more on social safety net programs like food stamps or Temporary Assistance to Needy Families (formerly known as welfare) when families turn to them after their benefits run out.

President Obama called for Congress to pass an emergency extension of the program from his vacation on Friday, but Congress is in recess so any action will have to wait for the new year. Senate Majority Leader Harry Reid (D-NV) has said an extension will be the top issue for his chamber when Congress returns on January 6 and other Democrats have made a noisy push for reauthorizing the program. Yet Republicans have indicated they may not support extending it despite the fact that many used to be in favor of the long-term benefits.

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