This past Saturday 1.3 million Americans lost their unemployment benefits. They are among the 4 million long-term unemployed who have been without work for more than six months.
Melissa Kearney, a senior fellow at the Brookings Institution and director of its Hamilton Project, tells The Daily Ticker that these extended benefits not only help the long-term unemployed but the broader economy as well.
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"It puts money into the hands of individuals who have lost their earnings stream..iIt allows families to maintain their rent payments, their mortgage payments and continue to put food on the table," she says in the attached video.
According to the Congressional Budget Office, every dollar of unemployment benefits increases economic activity by $1.10 and boosts GDP by about 0.2% annually. At the same, however, the CBO says continuing extended jobless benefits for a year would increase federal spending by about $25 billion.
Kearney, who co-wrote a recent Brookings report "The Importance of Unemployment Insurance for American Families and the Economy: Take 2," says extending emergency jobless benefits is the right thing to do in an economy where there are three unemployed workers for every job opening.
"For some unemployed workers the odds of finding a job that is suitable for their skill level are vastly worse than that," she notes.
She continues: "The rate of long-term unemployment is at a historic high -- nearly 4 million individuals -- have been looking for work for over 6 months. Never before has the federal government allowed this emergency unemployment compensation to expire when the rate of long-term unemployment was this high."
Extending emergency jobless benefits is expected to be at the top of the Democratic agenda when Congress reconvenes next Monday.
Senators Jack Reed (D-R.I.) and Dean Heller (R-Nev.) have already proposed extending unemployment benefits for three months, which President Obama has endorsed. Opposition is expected in the House where only one Republican member voted for a three-month extension of emergency jobless benefits just before the holiday recess, according to a column written by Representative Louise Slaughter (D-N.Y.) in Monday's Huffington Post.
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