CHN: Economy Continues to Struggle As Long-Term Unemployed Workers See Benefits Cut
Legislation enacted by Congress last February, the Middle Class Tax Relief and Job Creation Act of 2012 (PL 112-096), calls for phasing in a reduction in the number of weeks of federal unemployment insurance (UI) available to unemployed workers in the Extended Benefits program. In most states the first 26 weeks of benefits comes from the regular state-funded unemployment program. Workers who exhaust those benefits can receive additional weeks of federally-funded benefits. Prior to the agreement, in states with unemployment rates of 9 percent and above a worker could receive a maximum of 99 weeks of UI. PL 112-096 reduces the maximum benefits those workers will receive to 73 weeks. Workers in states that have from 7 to 9 percent unemployment rates had their maximum weeks of UI cut to 63. Workers in states whose unemployment is in the 6-7 percent range will see their maximum number of weeks shrink to 54, and for states with rates under 6 percent the maximum will be 40 weeks. In each category between 19 and 36 weeks of UI are lost. According to an analysis from the National Employment Law Project (NELP), already more than 400,000 workers in 27 states will have lost between 13 and 20 weeks of UI by the end of May.
The lack of benefits creates extreme hardships for families of unemployed workers who have not been able to find work and struggle to put food on the table and meet other basic needs. The cut in UI benefits also affects the overall economy. A recent Department of Labor analysis shows that UI benefits are an even stronger stabilizing factor during this economic recovery than in prior ones with every $1 in benefits resulting in $2 in benefits to the economy.
With a national unemployment rate of 8.1 percent and more unemployed workers whose benefits have expired or who do not qualify for benefits it is incumbent that federal investments made in education and training as well as in rebuilding America’s infrastructure. The current emphasis by federal legislators on reducing the deficit by cutting spending in these areas will serve to delay the recovery and deepen the pain families are experiencing.