My latest post for U.S. News & World Report’s Economic Intelligence blog explains why policymakers should quickly enact the Senate’s bipartisan deal to restore Emergency Unemployment Compensation (EUC) benefits. Here’s an excerpt:
There comes a point, as the economy improves and jobs are more plentiful, when policymakers should let EUC expire. But, we’re not there yet….
Most tellingly, long-term unemployment remains much higher than at any previous time when policymakers allowed emergency UI to expire (see chart). The economic case for restoring EUC until the job market is more robust remains strong. The long-term unemployed face greater difficulties than other jobseekers. Long spells of unemployment erode their job skills. Worse, employers seem more reluctant to hire the long-term unemployed than other jobseekers with similar qualifications.
In the face of these obstacles, emergency jobless benefits keep many long-term unemployed looking for work rather than dropping out of the labor force. They generate additional consumer spending that supports the recovery. And, as a an emergency program that ends when the emergency passes, EUC does not compromise future deficit reduction efforts the way, say, lawmakers’ routine extension of expiring tax provisions without offsetting the costs does.
See the full post here.