WASHINGTON — Millions of Americans have been forced to rely on unemployment payments for extended periods as the nation struggles through its longest period of high joblessness in a generation, and critics are taking aim, saying that the Depression-era program created as a temporary bridge for laid-off workers is turning into an expensive entitlement.
About 11.4 million out-of-work people now collect unemployment compensation, at a cost of $10 billion a month. Half of them have been receiving payments for more than six months, the usual insurance limit. But under multiple extensions enacted by the federal government in response to the downturn, workers can collect the payments for as long as 99 weeks in states with the highest unemployment rates — the longest period since the program’s inception.
The unemployed say extensions help to tide them over in unusually difficult times when jobs are hard to come by. But complaints that extending unemployment payments discourages job-seeking have begun to bubble into the political debate. Sen. Jim Bunning, R-Ky., recently single-handedly held up the latest extension, a bill to keep unemployment benefits in place for another 30 days, saying Congress should find other cuts to cover its $10 billion price tag.
Andrew Stettner, deputy director of the National Employment Law Center, says there’s a good reason people are out of work for so long. There are six unemployed Americans for every available job, he said.
The 14.9 million jobless Americans have been out of work an average of 29.7 weeks, just below January’s 30.2-week average. Those levels are the highest since the government began keeping those records in the 1950s, according to Stettner.
Although the availability of long-term unemployment benefits “could dampen people’s efforts to look for work,” the Congressional Budget Office said in a February report, that concern “is less of a factor when employment opportunities are expected to be limited for some time.”
The report went on to say that people receiving unemployment benefits tend to plow the money right back into the economy, making them “both timely and cost-effective in spurring economic activity and employment.”
Today, the unemployed confront a changing workplace. The Obama administration has tried to address that by investing heavily in education, clean energy and scientific research, which officials say will create the jobs of the future. But that takes time, and jobs are being lost faster than new kinds can be created.
“It is appropriate and natural for Congress to extend the time limit of unemployment insurance with the job market as bad as it is,” said James Sherk, a labor economist at the Heritage Foundation. “But by quadrupling it, it is no longer an unemployment insurance program but a welfare program.”
