Podcast: Emergency Unemployment Insurance Benefits Remain Critical

November 9, 2010

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About the Speaker


Download the mp3 of this podcast (3:48)

I’m Keri Fulton and I’m here with Chad Stone, the Center’s Chief Economist to discuss what’s at stake if Congress fails to renew the federal emergency unemployment benefits program that helps millions of laid off workers meet their families’ basic expenses at a time when jobs remain very hard to find.

1. Chad, what are federal emergency unemployment benefits and how do they differ from regular unemployment insurance benefits?

During normal times, unemployed workers typically can receive up to 26 weeks of unemployment insurance benefits while they look for a job. In a recession, job opportunities become scarce and it can take longer than 26 weeks to find a job no matter how hard you are looking. That’s why in every major recession since the 1950s, Congress has enacted a temporary program to provide additional weeks of federal benefits to workers who don’t find a job before their 26 weeks of regular state benefits run out. The current federal emergency program is scheduled to expire at the end of this month, even though the unemployment rate is near 10 percent and over two-fifths of the unemployed have been looking for a job for more than 26 weeks.

2. How many people receive federal emergency unemployment insurance benefits and what will happen to them if Congress fails to act?

About 5 million people rely on these benefits right now and hundreds of thousands of people are running out of their regular state benefits each month. If Congress lets emergency federal unemployment insurance benefits expire, it will be 26-weeks-and-out for unemployed workers in most states and benefits will be sharply curtailed in the rest. Unemployment Insurance is the one program that helps middle class families get by when they lose a paycheck and there’s no other program for most of them to turn to. Without federal benefits, they will have to cut back even further on their spending. That’s more hardship for them and their families but it also drains valuable purchasing power from the economy.

3. But, some would argue that it’s time to let these benefits expire because the recession is over. Is that a valid argument?

No, it isn’t -- on two counts. First, the unemployment rate is stuck at a very high 9.6 percent and job opportunities remain very scarce. Second, the legacy of this recession – the worst recession since the 1930s – is a huge jobs deficit and an economy that is operating far below its full capacity to produce goods and services and growing only very slowly. Congress has always kept emergency federal jobless benefits in place until the economy was back on track AND job prospects were improving. The highest the unemployment rate has ever been when federal benefits expired was 7.2 percent or almost two-and-a-half percentage points lower than it is now.

4. What should Congress do?

Congress should make sure that unemployed workers and their families are not prematurely cut off from federal emergency unemployment insurance benefits during times like this – when there is only one job opening for every four to five workers. With the unemployment rate expected to remain above 9 percent through next year, Congress should make sure a program to give federal emergency benefits to people who run out of their regular benefits is available for another year. Those benefits clearly would help unemployed workers and their families, but the additional spending supported by federal unemployment insurance benefits would also help to keep the economy moving.

Thanks for joining me, Chad.

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