According to a new report from the Annie E. Casey Foundation, youth unemployment — defined as unemployment for Americans aged 16-24 — is currently the highest its been in the post-war era:

Youth employment is at its lowest level since World War II; only about half of young people ages 16 to 24 held jobs in 2011. Among the teens in that group, only 1 in 4 is now employed, compared to 46 percent in 2000. Overall, 6.5 million people ages 16 to 24 are both out of school and out of work, statistics that suggest dire consequences for financial stability and employment prospects in that population.

More and more doors are closing for these young people. Entry-level jobs at fast-food restaurants and clothing stores that high school dropouts once could depend on to start their careers now go to older workers with better experience and credentials. It often takes a GED to get a job flipping hamburgers. Even some with college degrees are having trouble finding work. At this rate, a generation will grow up with little early work experience, missing the chance to build knowledge and the job-readiness skills that come from holding part-time and starter jobs.

Being unemployed from an early age can have lasting impacts throughout a workers life, as each missed year of work translates into “2 percent to 3 percent less earnings each year thereafter.” This effect is so severe, that college students who graduated during the 1982 recession were still earning less than students who graduated into a strong economy ten years later.

The U.S. is not alone in grappling with sky-high youth unemployment. Europe, in fact, is dealing with the prospect of a “lost generation” due to the inability of its young people to find work.

Without an extension, two million unemployed workers will lose their federal unemployment insurance benefits at year’s end. Congress has never allowed unemployment benefits to expire with the unemployment rate as high as it is today.

President Obama’s plan to avert the so-called “fiscal cliff” included an extension of unemployment benefits. And now Senate Democrats are hopping on board, according to The Hill:

A majority of Senate Democrats are backing a yearlong extension of federal unemployment benefits that are set to expire at the end of the year.

Sen. Jack Reed (R.I.) and 41 of his 53 colleagues are lining up behind a proposal to extend the federal benefits program through 2013, according to a letter sent to Senate leaders on Monday.

“We are writing to express our deep concern regarding the expiration of federal support for unemployment insurance at the end of the year,” they wrote.

“Unemployment insurance is an essential component of our ongoing economic recovery and provides support to workers and their families who have been laid off through no fault of their own as they search for work.”

Research has shown that unemployment benefits — in addition to boosting demand in the economy and thus creating jobs — actually increase the number of people that become reemployed, “because they motivated people to not exit the labor force and stop looking for work.” The San Francisco Federal Reserve has found that workers who receive unemployment benefits stay do not stay unemployed longer than workers who receive no benefits.

In addition to those millions facing the prospect of losing their benefits, half of Americans who are eligible for unemployment insurance never even apply.

While Washington obsesses over the so-called “fiscal cliff” — the set of tax increases and spending cuts scheduled to take place at the end of the year — America’s unemployed are facing a cliff of a different kind. In January, the expanded federal unemployment insurance program will expire, cutting off benefits for millions of Americans.

According to the Congressional Budget Office, extending unemployment insurance won’t just help those Americans struggling to find work in a still-sluggish economy. It will also help create 300,000 jobs:

For the three options involving extensions for an entire year—Options 1, 2, and 4—economic output would be $1.10 higher per dollar of budgetary cost, on average, in 2013, CBO estimates, and employment would be increased by six years of full-time-equivalent employment per million dollars of budgetary cost (see figure below).

Under Option 1 [a full, year-long extension], for example, which extends the benefits provided under the current EUC and EB programs at a total budgetary cost of $30 billion, CBO estimates that gross domestic product adjusted for inflation would be 0.2 percent higher in the fourth quarter of 2013 and that full-time-equivalent employment would be 0.3 million higher at that time than it would be under current law.

Unemployment insurance kept 2.3 million people out of poverty last year, despite America’s system being one of the stingiest in the developed world. Already, 500,000 Americans have lost benefits due to the program’s faulty design and Congress restricting eligibility. (HT: Matt O’Brien)

America’s unemployment insurance program is not as robust as those in many industrialized nations, but the program that is speeding toward massive reductions if Congress doesn’t extend it before the end of the year still kept more than 2 million Americans out of poverty in 2011. According to the National Employment Law Project, which is calling on Congress to re-authorize the federal unemployment compensation program before the end of the year, unemployment insurance kept 2.3 million out of poverty, cutting the number of Americans who were entered the ranks of poverty last year in half:

Were it not for unemployment insurance, the increase in the number of Americans living in poverty would have doubled over the last year. (While the number of people in poverty grew by 2.3 million from 2010 to 2011, unemployment insurance prevented an additional 2.3 million Americans from joining their ranks.)

Unemployment insurance is generally handled by the states, but because long-term unemployment was exacerbated during the Great Recession, Congress enacted the Emergency Unemployment Compensation program in 2008. If the federal program isn’t extended by the end of the year, 2 million Americans could lose unemployment benefits, and another 1 million will join them in the early part of 2013. More than 500,000 recipients lost benefits earlier this year because of the way the program is administered and because Congress reduced eligibility for it.

Republicans have pushed against past extensions of the program, arguing that it creates a culture of dependency on federal benefits that reduce the incentive to find work. But the federal program requires workers to search for jobs, and studies have shown that recipients look harder for jobs than those who don’t receive benefits. Meanwhile, in industrialized nations, there is no proof that more generous unemployment insurance programs lead to higher levels of employment: Greece’s unemployment rate, for instance, has soared even though it has one of the least generous programs in the world, while Israel boasts both a generous unemployment program and a falling unemployment rate.

Critics of the United States’ unemployment insurance program often claim that the program is too generous, and that it fosters a culture of laziness that inspires workers to stay home on the couch collecting benefits instead of searching for jobs.

This chart from The Atlantic’s Matthew O’Brien shows that the United States actually has one of the least generous unemployment insurance programs in the wealthy industrialized world. The chart, generated by the Organization for Economic Cooperation and Development’s benefits calculator, assumes that the unemployed were making their nation’s average salary before they lost their jobs:

As O’Brien points out, the chart also proves the “culture of laziness” critique of the unemployment insurance program wrong, since there is very little correlation between generous unemployment insurance programs and high unemployment rates. Greece, for instance, has one of the least generous unemployment programs, but it has higher unemployment than nearly every country included. Israel is among the most generous, and its unemployment rate declined rapidly after peaking early in the recession. Spain ranks in the middle and has a higher unemployment rate than any country on the chart.

Worse, though, is the fact that America’s federal unemployment insurance program has gotten less robust since 2007, and it could soon face bigger reductions if not outright expiration. Two million people will lose benefits at the end of the year if the program isn’t extended during debt negotiations, and another million would lose benefits early in 2013. More than a half-million have already lost benefits because of the way the federal program calculates them and because eligibility was reduced when the program was extended earlier this year.

Failure to extend the federal emergency unemployment insurance program that will expire at the end of the year absent Congressional action would cost the United States economy roughly 400,000 jobs, an Economic Policy Institute study says.

The Emergency Unemployment Compensation program, signed into law at the beginning of the Great Recession in 2008, provides assistance to long-term unemployed workers who have exhausted their state-level unemployment assistance eligibility. The program’s expiration is part of the looming “fiscal cliff” that hits at the end of the year, and though the fiscal cliff discussions have thus far focused on the Bush tax cuts, EPI found that the unemployment extension would provide a bigger boost to economic growth and create more jobs than an extension of the high-income Bush tax rates:

Spending $30 billion on unemployment insurance extensions in 2013 would increase consumer spending and expand GDP by an estimated $48 billion, raising our $15.8 trillion GDP by roughly 0.3 percent. This increase in economic activity would translate into roughly 400,000 jobs. In comparison, continuing the upper-income Bush-era tax cuts in 2013 would cost $52 billion—nearly 75 percent more than continuing the UI extensions—and generate just 102,000 jobs, nearly 75 percent fewer jobs than the number created by continuing the UI extensions.

More than five million Americans have been unemployed for longer than six months, and more than two million will lose access to federal unemployment insurance if the program lapses in December. Another million would lose benefits in April if no extension is passed.

Congress last passed an extension early this year, though it cut the number of weeks of eligibility. As a result, 500,000 unemployed workers lost access to the program between the beginning of 2012 and July. Republicans have often opposed EUC’s extension, arguing that it fosters laziness and dependency and prevents the unemployed from searching for jobs, even though EUC requires recipients to conduct job searches and studies have shown that people who receive unemployment insurance work harder and faster to find employment than those who don’t.

The expanded federal unemployment insurance program that provides benefits to millions of long-term unemployed Americans is set to expire at the end of December. If Congress fails to extend it, roughly two million Americans could lose their monthly unemployment checks.

States provide unemployment insurance for the first 27 weeks after a worker loses his or her job; after that, the federal government has provided benefits under the Emergency Unemployment Compensation program passed in 2008. There are currently five million Americans who have been out of work for longer than six months, and of those, virtually everyone who has been out of work since the end of July stands to lose their benefits at the end of the year. Even more could lose benefits by April without a renewal of the EUC program, the Washington Post reports:

These workers have exhausted their state unemployment insurance, leaving them reliant on the federal program.

In addition to those at risk of abruptly losing their benefits in December, 1 million people would have their checks curtailed by April if the program is not renewed, according to lawmakers and advocates pushing for an extension.

Congress last extended the federal unemployment program earlier this year, but it cut the number of weeks of assistance when it did so. More than 500,000 Americans lost unemployment insurance between the beginning of 2012 and the end of July, largely because the formula used to calculate eligibility for those benefits is based on comparisons of state unemployment rates. So even though some states still have persistently high unemployment rates, they have lost access to EUC because those rates have improved slightly since they peaked during the Great Recession.

Republicans have previously created fights over unemployment extensions, arguing that the program creates a culture of dependency and causes beneficiaries to stop looking for jobs. Despite those claims, the EUC program requires recipients to search for jobs while they receive benefits, and studies have shown that recipients of unemployment insurance look harder for jobs than those who don’t benefit from the program.