Failure to Extend Emergency Unemployment Benefits Will Hurt Jobless Workers in Every State
Nearly 5 Million Expected to Lose Out on Benefits in Next 12 Months

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By Chad Stone

December 11, 2013

A needed extension of federal emergency jobless benefits was absent from this week’s budget agreement, potentially leaving almost 5 million jobless workers in the lurch over the next 12 months, according to Department of Labor estimates.[1]  Failure to extend the Emergency Unemployment Compensation (EUC) program would affect jobless workers in every state.

As Figure 1[2] shows:

  • An estimated 1.3 million jobless workers now receiving EUC will receive no benefits after Christmas week if the program expires as scheduled. 
  • An estimated 1.9 million people receiving regular state unemployment insurance (UI) payments, which typically run for a maximum of six months, will exhaust them in the first half of 2014 before they can find a job.  If EUC expires, these workers will receive no further benefits.
  • An estimated 1.6 million people who lose their jobs in the first half of 2014 will exhaust their regular state UI in the second half of the year before they can find a job.  If EUC expires, these workers will receive no further benefits.

In all, an estimated 4.9 million workers would lose out on EUC benefits by the end of 2014.

Emergency federal UI programs like EUC are designed to phase down as the labor market improves and eventually expire.  The phasing down is underway — the maximum number of weeks of EUC plus regular UI has fallen from 99 to 73, and that maximum is available in only a handful of states — but it is too soon to let the program expire.

While the unemployment rate has fallen from its recession peak to 7.0 percent, this measure alone provides too optimistic a picture of the overall health of the labor market:[3]

  • The share of the population with a job, which plunged in the recession to levels last seen in the 1980s, has changed little in the ensuing four years.  The recession drove many people out of the labor force, and lack of job opportunities in the ongoing jobs slump has kept many potential jobseekers on the sidelines.  Many of these people would like to work and, in a stronger labor market, they would likely have a job or at least be looking, but they are not looking actively enough to be counted as officially unemployed.  Their absence from the ranks of the officially unemployed keeps the unemployment rate lower than it otherwise would be.
  • Long-term unemployment remains a significant concern.  Nearly two-fifths (37.3 percent) of the 10.9 million people who are unemployed — 4.1 million people — have been looking for work for 27 weeks or longer. These long-term unemployed represent 2.6 percent of the labor force.  At 2.6 percent, the long-term unemployment rate is at least twice as high as when any of the emergency federal UI programs that policymakers enacted in each of the previous seven major recessions expired. 

Table 1 shows the Department of Labor’s estimates of the number of people in each state that would be affected over the next 12 months if EUC is allowed to expire.  In 11 states, more than 100,000 people would lose access to benefits.

Table 1
People Losing Access to Emergency Unemployment Compensation
Through December 2014 if Program Expires as Scheduled
State Unemployed losing access to benefits State Unemployed losing access to benefits
Alabama 48,100 Nebraska 16,700
Alaska 23,300 Nevada 60,300
Arizona 67,000 New Hampshire 8,500
Arkansas 40,300 New Jersey 260,100
California 836,100 New Mexico 25,500
Colorado 72,800 New York 383,000
Connecticut 85,100 North Carolina 0*
Delaware 13,800 North Dakota 7,900
District of Columbia 18,200 Ohio 128,600
Florida 260,400 Oklahoma 33,000
Georgia 164,700 Oregon 76,100
Hawaii 13,300 Pennsylvania 262,500
Idaho 20,300 Puerto Rico 80,200
Illinois 230,500 Rhode Island 21,700
Indiana 69,300 South Carolina 52,400
Iowa 35,500 South Dakota 1,600
Kansas 35,300 Tennessee 79,000
Kentucky 53,200 Texas 285,200
Louisiana 30,400 Utah 20,200
Maine 18,100 Vermont 5,100
Maryland 82,600 Virgin Islands 3,500
Massachusetts 141,000 Virginia 69,900
Michigan 189,700 Washington 94,100
Minnesota 65,500 West Virginia 24,700
Mississippi 37,600 Wisconsin 99,000
Missouri 84,500 Wyoming 6,700
Montana 14,300    
*Emergency Unemployment Compensation is not available in North Carolina because earlier this year, the state cut weekly UI benefit levels in violation of federal rules that require states that accept emergency federal benefits to maintain their benefit levels.
Source: Department of Labor and Council of Economic Advisers

End notes:

[1] The Council of Economic Advisers and the Department of Labor, “The Economic Benefits of Extending Unemployment Insurance,” December 2013, Figure 7, p. 18,  http://www.whitehouse.gov/sites/default/files/docs/uireport-2013-12-4.pdf.

[2] Adapted from the Council of Economic Advisers and Department of Labor report.

[3] Chad Stone, “On Emergency Jobless Benefits, Don’t Be Fooled by November’s Drop in Unemployment,” Off the Charts blog, Center on Budget and Policy Priorities, December 10, 2013, http://www.offthechartsblog.org/on-emergency-jobless-benefits-dont-be-fooled-by-novembers-drop-in-unemployment/.

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