The federal program of supplemental unemployment insurance that provided 1.3 million jobless Americans with a modicum of cash was abruptly ended because it was not included in the year end budget passed by Congress. While our representatives headed home for the Christmas break, the long-term jobless lost their benefits. The average weekly benefit is $270.
The likelihood that Congress will extend unemployment insurance soon is dubious. Unless this is done, another 3.5 million Americans who would have qualified for benefits will be left out in the cold. Conservatives will probably insist that any extension be coupled with cuts in other social net programs, giving with one hand as they take away with the other.
Long-term unemployment – being unemployed for more than six months - is high because the recovery from the latest recession failed to produce enough jobs. The average length of unemployment is now about 37 weeks. Before the recession it was 20 weeks. With the expiration of these benefits, only one in four unemployed Americans are receiving unemployment insurance.
Ending unemployment insurance benefits for long-term jobless workers will be particularly harmful in New York City, especially for people of color who comprise the bulk of the long-term unemployed. Half of unemployed persons in the city have been unemployed long-term. Latinos are the demographic group most impacted by long-term unemployment in New York City — 58 percent of unemployed Latinos have been out of work more than six months.
Failure to extend benefits will also have a damaging effect on the nation’s economy, cutting job growth by about 300,000 this year and billions in consumer spending. Increased consumer spending is crucial to boosting the economy.
Long-term unemployment creates many personal problems, financial and psychological. These include the deterioration of skills, the exhaustion of savings and/or retirement plans, and employment discrimination against the long-term jobless. Without jobless benefits a certain number of families will fall into poverty. Unemployment insurance had kept millions of Americans out of poverty during and just after the recession.
The nation’s official unemployment rate is now at 7 percent while New York City’s unemployment rate is 8.7 percent. And that doesn’t count the number of people who have simply given up looking for work in an economy where there are three unemployed for every job opening. The unemployment rate will probably decrease in the ensuing months as many older workers simply drop out of the labor force. They will be jobless; they just won’t be counted by the government as unemployed. The pre-recession days of 5 percent unemployment in the city seems like a figment of our imagination now.
Congress must understand that there are areas lagging behind in the recovery. While the number of unemployed in the nation is half what it was before the recession, the number of unemployed in New York City is still at nearly twice the level it was before the recession, driven in part by jobseekers coming to the city during the recession with the hope of finding better job prospects.
In these last few years, Congress has shown an appalling lack of understanding of poverty and compassion for the poor in its policies. The latest example is the passage of an agriculture bill without funding for the food stamp program, cutting off food aid to millions of the poor, many of them children.
There are some in Congress who say they will work to reinstate unemployment insurance benefits. Let us hope that they can succeed. It’s time to stop making war on the most vulnerable of Americans.