Unemployment Benefits Suddenly End, Job-Seekers Suffering

Unemployment benefits suddenly ended for 1.3 million American job-seekers today, thanks to the failure of congress to include a new extension of help to the long-term unemployed in the budget it passed just before going on Christmas vacation.

The cutoff, pressed by congressional Republicans who believe, according to GOP Senator Rand Paul of Kentucky, that granting workers the help they need to eat and keep the lights on simply encourages them to relax and not look for jobs, was also agreed to by congressional Democrats because they were simply eager to get a budget passed, as New York Times columnist Andrew Rosenthal has noted.

Paul recently called extending benefits a “disservice” to the very out-of-work job seekers the benefits actually serve, in an interview on Fox News and quoted by CNN, because when they receive money from the government to help them get by, they are less likely to look for jobs, he says.

In fact, no matter how hard an unemployed person looks for a job in the current economic climate, the odds are not favorable. According to the Economic Policy Institute, as of the end of November, the ratio of available jobs to job seekers stands at 2.9-to-1.

In other words, For approximately every three people looking for a job, there is only one job available.

But the long-term unemployed have it even harder.

The unemployment benefits cutoff affects only people who have been out of work for more than 26 weeks. Those struggling job-seekers face even longer odds, because employers discriminate against people who have not held a job recently.

“No one has a very good answer for these workers,” wrote Washington Post columnist Ezra Klein. “Employers don’t want to hire them because they’ve been unemployed for so long, which in turn extends their unemployment and makes it even harder for them to find a job. And now we’re just cutting them loose.”

The average amount paid to unemployed job seekers under the current extended unemployment benefits program was $1,166 per month, according to The Associated Press.

Republicans have also argued, as explained by a recent article in The Los Angeles Times, that the new unemployment benefits extension would cost over $25 billion and that is just too much.

But a recent report by the White House Council of Economic Advisors estimates that cutting off benefits will slow economic growth by between 0.2 and 0.4 percentage points and cause employers to hire 240,000 fewer people in 2014 than they otherwise would have, according to The Detroit News, a paper in the hard-hit state of Michigan.

The reason is simple. Unlike wealthy people who tend to hold on to their money in savings, keeping it out of the economy, people who collect unemployment benefits spend almost every dollar on essential goods and services they otherwise could not afford.

That money, geting pumped straight back into the economy, is a boon for businesses.

President Barack Obama took time out from his Hawaiian vacation to urge congress to pass a bill extending unemployment benefits for three months as soon as legislators return to work on January 6. Senate Majority Leader Harry Reid, a Nevada Democrat, has promised to bring the three-month unemployment benefits extension to a vote on that day.