Federal Jobless Benefits Will Stimulate the Economy While Helping Over Three Million Jobless Families Who Will Run Out of State Benefits This Year

Source: Maurice Emsellem and Omar Semidey, National Employment Law Project, February 12, 2008

Working families are bracing for major layoffs amid growing signs that the nation may be heading toward a serious recession. Despite their compelling concerns and strong evidence that federal jobless benefits will immediately stimulate the economy, the U.S. Senate recently came one vote short of the 60 votes needed to pass an economic stimulus package (Economic Stimulus Act of 2008) that included a 13-week federal extension of unemployment benefits. That leaves an estimated three million workers without any additional federal support when they run out of their 26 weeks of state jobless benefits this year.

Now, the attention shifts to Congressional efforts to promptly enact separate legislation to extend federal jobless benefits to help boost the economy. This paper makes the case for an immediate extension of jobless benefits and federal reforms to modernize the unemployment insurance program. It provides new state estimates of the number of workers who will exhaust their state unemployment benefits this year as well as a rebuttal to the argument of Bush Administration officials that unemployment has not reached high enough levels compared to prior recessions to justify an extension of jobless benefits. Underscoring the harshness of the downturn on long-established workers and the consequences of inaction by Congress for moderate-income families, the paper also finds that the unemployed include a disproportionately large number of older workers who are looking for work for longer periods of time in today’s struggling economy.

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