Unemployment Benefits Need to be Extended NOW

[Omaha Steve]

http://www.aflcio.org/mediacenter/speakout/christine_owens.cfm

By Christine L. Owens
Executive Director of the National Employment Law Project
Former Policy Director for the AFL-CIO



The U.S. Department of Labor’s employment report for February was another grim reminder of how bad the economy is for workers. Employers have shed jobs, people are dropping out of the workforce and growing numbers are forced to work part-time because they cannot get full-time hours. Added to the other signs of economic downturn, the employment report is a strong case for a federal extension of unemployment benefits, to stimulate the economy and provide income support to the 3 million jobless workers who will run out of their 26 weeks of state benefits this year and without new jobs or extended benefits, risk losing everything.

The president and many in Congress oppose extending benefits because, they say, the unemployment rate is not high enough. Reliance on the unemployment rate alone to determine whether and when to enact extended benefits is misguided for a number of reasons, not least of which is that the unemployment rate is a lagging indicator: By the time it rises significantly, a recession will be well under way, or may have ended altogether. Since the point of extended benefits is to stimulate the economy—and hence, avoid or minimize a recession—it makes no sense to wait until the damage is done before taking steps to prevent it.

Another problem with considering only the overall unemployment rate is that it ignores altogether today’s unusually high rate of long-term unemployment. Since it is precisely the long-term unemployed who stand to gain or lose the most in the debate over extended benefits, it is important to look closely at what is happening with respect to this important indicator of labor force well-being. By many measures, long-term unemployment is worse now than at the start of previous recessions, underscoring the urgent need of extended benefits.

First, long-term unemployment has remained high throughout this recovery. For 31 consecutive months beginning in November 2002, more than 20 percent of jobless workers were unemployed for at least six months. Similar long-term unemployment rates prevailed for only 23 months during the 1990’s recovery and only 18 months in the 1980s.

Second, the share and number of long-term unemployed workers are greater now than when the last two recessions began. The long-term unemployed are 17.5 percent of jobless workers today, compared with 11.1 percent in March 2001 and 9.8 percent in July 1990. Last month, nearly 1.3 million workers had been unemployed for more than six months, roughly double the 696,000 in 2001 and 688,000 in 1990.

Third, more jobless workers are exhausting their state unemployment benefits now. The recent benefit exhaustion rate is 36 percent, compared with 32 percent in 2001 and 28 percent in 1990.

FULL story at link.