Out in the Cold for the Holidays

Posted by: Christine Riordan on Oct 22, 2010
National Employment Law Project 
http://unemployedworkers.org/sites/unemployedworkers/index.php/site/blog_entry/out_in_the_cold_for_the_holidays

With the holidays approaching and the jobs market barely
chugging along, now is not the time to allow
unemployment extensions go by the wayside. Yet the
current package of extensions expires on November 30th,
and unless Congress acts quickly, 1.2 million people
will be left out in the cold during the holiday season.

December will be a stark month for over a million people
facing a cut-off of their federal benefits, which are
made up of the Emergency Unemployment Compensation (EUC)
and Extended Benefits (EB) programs. And this experience
may not be new: earlier this summer, congressional
gridlock left about 2.5 million people cut-off from
federal benefits starting in June. After a long and
protracted fight, the federal programs were finally
restored, but Congress’ failure to renew them in time
left some families without benefits for nearly two
months.

As our new analysis shows, without reauthorization, over
a million people will fall off the rolls in December.
This includes over 800,000 people who will finish out
one of their EUC tiers and will not be able to move on
to the next available set of weeks available in their
state, whether through another EUC tier or Extended
Benefits. Additionally, nearly 400,000 people will lose
all access to any form of an extension after running out
of their regular state benefits, which only are allotted
for up to 26 weeks. This means that in most states,
recently laid-off workers will receive only six months
of benefits or less, even though unemployment is as high
or higher than it was when the current federal programs
were first enacted.

And the unemployment crisis is going nowhere fast. We’ve
had 17 consecutive months with unemployment rates above
nine percent, and there is still only one job opening
for every five jobless workers. All told, we need 11.5
million jobs to dig ourselves out of this jobs crisis
and reach the level of employment we had prior to the
recession. Now is clearly not the time to have dragged-
out debates about renewing federal benefits that will
leave millions with few other options if they run out.

Over the summer, we started seeing a lot of hype in
these debates about workers living the highlife on their
unemployment benefits. But, the fact is that the program
provides a modest income that is certainly not enough to
deter individuals from working. Currently, the average
extension recipient receives about $1,257 per month in
benefits, which covers half the income needed for the
most basic necessities of food, transportation and
housing. This support helps keep families afloat:
without benefits, an additional 3.3 million people would
have fallen into poverty in 2009.

Just as much as they’re a lifeline for families, federal
benefits are also a lifeline to the economy, especially
holiday retail sales. As far as retailers and economic
recovery are concerned, there is no worse time to cut
job seekers off unemployment benefits, which boost
spending and help generate jobs. Department stores,
electronics chains, and discounters count on holiday
sales for over one-fifth of their total annual revenues,
and a lapse in benefits will hurt retailers, already
struggling through a sluggish year, as consumer spending
falls during the holiday season.

Cutting off unemployment benefits in November will
certainly leave a lump of coal in the stockings of
workers and retailers alike. When it returns to work on
November 15th heading into the Thanksgiving holiday,
Congress has a unique opportunity to set aside
partisanship and come together in support of hardworking
Americans on the extension of unemployment benefits.
Never before in the history of the program have federal
jobless benefits been cut when unemployment was this
high for this long. Now is not the time to change
course, when the economy and working families need the
help most.

To read NELP’s report in full, click here.
https://docs.google.com/viewer?url=http://unemployedworkers.org/page/-/UI/2010/november.extension.report.pdf

Take Action! Become one of thousands of people who have
already signed the petition to Congress to extend
federal benefit programs.  Sign the Petition!

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