Unemployment

Chad Stone on the February Employment Report

February's solid jobs report shows that private employers have added jobs every month for five straight years. Unemployment has dropped sharply, though it has room to fall further.  To herald a truly healthy labor market, however, labor force participation should be higher – it fell in February as more people stopped looking for work than found jobs – which will mean a larger share of Americans should have a job; fewer people should be working part time because they can’t find full-time work; fewer people should experience long spells of unemployment before finding work; and wages should be rising faster.

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The Unconvincing Claim That Unemployment Benefits Hurt Jobs

Many conservatives, including the Wall Street Journal editorial page and House Ways and Means Chairman Paul Ryan, are touting new research claiming that the expiration of emergency federal unemployment insurance (UI) benefits at the end of 2013 led employers to create 1.8 million additional jobs in 2014.  The same researchers previously claimed that the existence of emergency federal jobless benefits explained most of the persistence of high unemployment in the recovery from the Great Recession. These findings merit considerable skepticism.

 

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Background

The federal-state unemployment insurance (UI) system helps people who have lost their jobs by temporarily replacing part of their wages.  Created in 1935, UI is a form of social insurance, with contributions being paid into the system on behalf of working people so that they have income support if they lose their jobs.  UI also helps sustain consumer demand during economic downturns, by providing a continuing stream of dollars for families to spend.

The UI system includes an extended benefits program, which provides additional weeks of benefits to jobless workers in states where the unemployment situation has worsened dramatically.  In addition, during and just after recessions, the federal government has historically provided funding for additional weeks of benefits in all states.

By the Numbers

Number of People Kept Out of Poverty by Unemployment Insurance
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