Number of Unemployed Going Without Federal Benefits Hits Record 3 Million

Since late December, when the federal Temporary Extended Unemployment Compensation program stopped providing additional aid to individuals exhausting their regular unemployment benefits, a record number of jobless workers have exhausted their regular benefits, gone without federal aid, and received neither a paycheck nor an unemployment check. Based on actual figures through August and the author’s estimates through mid-October:

• The three-million figure. From late December through the middle of October, an estimated 3,053,000 unemployed individuals will have exhausted their regular unemployment benefits. About 34,000 of them will have qualified for additional unemployment aid through the federal/state extended benefits program. The remaining three million individuals will not have qualified for any federal unemployment benefits.
• The record that has been set. The three million jobless workers exhausting their regular benefits and going without federal aid from late December through mid-October is higher than the number of such exhaustees in any other period of comparable length on record. ^[1]

State-by-State Data

The Temporary Extended Unemployment Compensation (TEUC) program was created in March 2002 to provide additional weeks of federally funded unemployment benefits to jobless workers who have run out of regular, state-funded unemployment benefits but have not found a job. TEUC provided up to 13 weeks of benefits to most workers who participated in it. The program phased out when Congress declined to extend the program beyond the close of December 2003. President Bush did not ask Congress for an extension. Individuals who have exhausted their regular unemployment benefits since December 20, 2003 have not been eligible for TEUC aid.

Table 1 shows state-by-state estimates of the number of exhaustees from late December through mid-October. While some state labor markets are stronger than others, the state-by-state estimates demonstrate that across the country, an exceptionally large number of unemployed workers have exhausted their regular benefits without finding work and have gone without a paycheck or unemployment benefits. As the table indicates:

• In eight states, the number of individuals who have exhausted their regular benefits but gone without federal aid has exceeded 100,000. These states include California, where nearly one-half million jobless workers have been denied aid, New York (230,000), Texas (189,000), Illinois (149,000), New Jersey (146,000), Pennsylvania (141,000), Michigan (128,000), and Florida (125,000). (In North Carolina, nearly 100,000 of the unemployed have now run out of their regular benefits and gone without federal aid.)
• In all but nine other states, more than 10,000 individuals have exhausted their regular aid but have not received further federal assistance.

Labor Market Health and the Termination of Federal Benefits

These figures reflect the far-from-robust labor market that has marked the past year and the enduring severity of long-term unemployment. This severity also is documented by other labor market indicators. For instance, according to the labor market report that the Department of Labor released Friday, October 8:

• In September, 21.8 percent of the unemployed were categorized as long-term unemployed — out of work 27 weeks or more. This marked a record-setting 24th month in a row that more than one in five of the unemployed were experiencing long-term unemployment spells. ^[2]
• Further, and somewhat unexpectedly, the labor market report released on Friday, October 8 showed that long-term unemployment rose from August to September, climbing to 1.747 million long-term unemployed workers in September. There are still one million more long-term unemployed workers than there were in March 2001, when the downturn officially began. There are also 400,000 more long-term unemployed than when the TEUC program was established in March 2002.

Also of note, the temporary federal unemployment benefits programs in place in both the early 1980s and early 1990s were not terminated until the number of jobs returned to or surpassed its level than there had been at the start of those downturns. By contrast, today there are still 940,000 fewer jobs than there were at the start of the latest downturn.

If the labor market begins to generate jobs at a healthy clip and long-term unemployment drops significantly, the absence of a temporary federal benefits program will be appropriate. But the central finding here — that a record three million individuals have already been denied aid due to the demise of the TEUC program — suggests that the program ended far too soon.