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  • High Long-Term Unemployment No Surprise

    Sen. Robert Byrd and Majority Leader Harry Reid (Photo by Scott J. Ferrell/Newscom)

    Congress is considering increasing the length of time unemployed workers can collect unemployment insurance (UI) benefits. Normally unemployed workers can collect UI benefits for up to 26 weeks. Congress changed the law to allow 39 weeks of benefits. Now many in Congress want to allow 46 weeks of benefits. One of the reasons Senate Majority Leader Harry Reid (D-NV) and Sen. Robert Byrd (D-WV) give for this change is the fact that long-term unemployment has increased.

    This is true: The number of workers unemployed for more than 26 weeks has increased. Part of the reason this has happened, however, is precisely because Congress extended UI benefits.

    Workers stay unemployed longer when the government pays longer unemployment benefits. The Congressional Budget Office estimates that a 13-week extension of benefits causes the typical workers to stay unemployed two weeks longer. Not coincidentally, the Bureau of Labor Statistics reports that the average duration of unemployment increased by 2.2 weeks since Congress lengthened UI benefits. The unemployment rate has also risen by 1 percentage point.

    Not all of this increase can be directly attributed to extended UI benefits, but some of it can. A Heritage study found that a 13-week extension of UI benefits, such as that Congress passed in June, would cause the unemployment rate to increase by approximately 0.2 percentage points. Increased UI benefits explain a fifth of the increase in the unemployment rate since June.

    Congress needs to remember that spending money and calling it stimulus does not mean that money is well spent or benefiting the economy. Good policy solves problems, not creates them. There are humanitarian reasons to extend UI benefits, but extended UI benefits also affect the choices unemployed workers make. Congress cannot use the increase in unemployment partly created by extended UI benefits as justification for extending UI benefits further.

    Posted in Economics [slideshow_deploy]

    17 Responses to High Long-Term Unemployment No Surprise

    1. Keira, Florida says:

      The numbers look pretty, but if you haven't been out looking for a job you don't know the reality of it. The truth is in many areas there are no jobs to be had.

      I have a dear friend who has been out of work (construction manager) since last November. Try as he might, there is just nothing availalbe in the region he lives. I know for a fact as I have also been trying to help him look. He's one of the lucky ones … his wife, so far, has been able to maintain her employment without layoff and she works a second job (a home-based business). With two kids at home and her day job in the scaling-back mode, they're scared and they have every right to be.

      While some people might sit on their rears and soak up the "free money" from the government, the $275 (pre-tax) a week Florida pays out doesn't cover much. This man would love to be back at work, supporting his family. He's going back to school in the spring to train for a new career since it doesn't look like his will be coming back any time soon.

      I'm sorry, but the numbers don't tell the whole story. With UI already exhausted for many, it's going to be a long, cold winter if something doesn't break soon.

    2. Sandra/NYC says:

      During this time unemployment is hard to come by. Everyday people released from their position. I have been employed for 28yrs by a major pharmaceutical company and was let go do to corporate takeovers and downsizing. Some of us need this extension until the economy takes a upward swing.

    3. David, Connecticut says:

      Mr. Sherk is obviously employed and collecting health benefits. I've paid into Unemployment Insurance for 35 years. My "benefits" are a bailout? That's like saying you should pay for any damage caused to your car out of your own pocket even though you pay premiums every month.

      Being unemployed is not the fault of the paltry $300/week. (Mr. Sherk, how many children can YOU feed on $300/week?). It is the fault of companies who's first reaction is to cut payroll instead of becoming more efficient.

    4. Chicago, Illinois says:

      I have been unemployed since last December. I have applied for over 200 jobs in and out of my profession. My profession is directly related to housing industry collapse. My extended unemployment has expired. I am desperite for an extension through the end of year. Many companies are telling me that they will not be hiring until after January 1. In the mean time I have applied for season work with no luck. This is the first time in many years I have seen long lines of people trying to get any job they can get their hands on. This is scary.

    5. Dave, Oregon says:

      I've been unemployed since April. I've worked in the Semiconductor business since 1983 but the industry has been moving to China since the turn of the century. I've been applying for any job I'm capable of doing but I've only gotten 4 interviews in the last 7 months. I'm more than willing to work for any wage but can't get an interview. Unemployment is the only thing keeping us afloat. Hopefully Mr Sherk will get a taste of what us unemployed workers are experiencing. Then he might understand.

    6. Taryn in Indiana says:

      WOW…its so sad that we have to be at the mercy of this extension. What has our world come to? I hope something gets decided soon. I'm searching for work, praying and being grateful for the little I do have left. I'v been unemployed for a year and exhausted my extended benefits. I have lost my home but I'm still keeping the faith.

    7. Janie, Colorado says:

      I, too have been unemployed since last December. I, too have paid into unemployment and all of those other programs for 35 years. I'm deeply insulted and disturbed by the attitude of people like Mr. Sherk. It most often seems to come from people who have been in the same job for decades, living in an insulated environment and have no clue what it's really like out here in the real world of job-hunting. I don't know who paid how much money for the Heritage study, but my street sense says that it's companies closing their doors everywhere we look that's causing unemployment! I have also had a number of people assume (erroneously) that I automatically received food stamps when I was on unemployment! Since my teenage daughter earns $8/hr, that puts us over the limit for two people to qualify. I don't even want to count how many jobs I've applied for. I was hopeful that I could get a "Christmas" job, although retail is not my field, but retail outlets are closing their doors every day. Even fast food places would rather hire someone that's bilingual, which I'm not. The way things stand today, we'll be lucky to have a meal of any kind on Thanksgiving.

    8. Karen Campbell Karen, D.C. says:

      I believe the point was that extending UI should be debated on humanatarian grounds not as part of a stimulus. Calling UI extensions an economic stimulus fools people into believing this policy will help create jobs and get them working again. The paper brings facts to the debate so we can have a more productive and honest discussion. The paper does not imply that we should not extend UI, but that we should not call it a stimulus that will get people working again.

    9. steve, azusa,ca says:

      He's right. Congress should not extend UI benefits because of the .2% increase caused by the last extention. I totaly agree.that

      They should extend UI benefits because they are human. They should extend them because they use their brains and have eyes to see what the blank is going On in the real world, that the rest of us live in. It should be done because they are compassionate American Human beings.

      Give billions to the billionares, because they will spend it and stimulate the economy.<-sarcasim

      (sigh)

      I need UI extended. I paid in for 25 years, served my country as a military police officer, 8 years.

      I was a drafter for a civil engineer, been out of work for a year. Im homeless, hungery, my cat is in surgery I paid half the bill, using my car payment, to save his life. I don't know how I am going to pay to get him back and i'll probably lose my car too. thank you senate

      Thank you for going on vacation for a week while people are starving. Thanks for comming back for 3 days, doing nothing and going on holliday till december. You people need to be fired. (then they would be "in touch" lol)

      stop giving money to millionars, and help me "bail out" my cat.

      You should not extend beacuse of some percentage number in some study. Also you should not deny based on this same number.

      We the PEPOLE

      not We the Statistics.

    10. Joni, Ohio says:

      Those are interesting statistics, but we need to explore their meaning a little more. Is it meaningful that people stay on the unemployment rolls slightly longer if unemployment insurance is extended? Yes, but why? Could the answer be that people still can't find work, and are taking advantage of the extra few weeks they can use to continue looking for work that pays a comparable salary to what they had, instead of prematurely settling on a much lower paying job, or relocating? Possibly. Could it be that if they take a job that pays far below their previous salary, or relocate to find a new job, they are stuck until they can find new work, which is extremely difficult during a recession and while working a full-time job (and expensive when relocating is involved). It's only reasonable that they take advantage of extended UI, in such instances. Also, every state has different laws regarding UI, so you may want to look into who is disqualified from collecting UI for taking a part-time or low pay job vs. who won't, depending on the state they live in. In Ohio, where the unemployment rate is 7.3%, UI is set at 50% of your previous wage. So it's not as if collecting UI is a viable alternative to working. When jobs are leaving the country quickly and no new industries are emerging to take their place fast enough, these people really just have nowhere else to turn.

    11. Crystal says:

      Here we are again, waiting for the goverment to lead us an below average payment schedule seven more weeks is not going to help get people back to work. I very much like too work but there are so many people trying to get that one open position that there no way out of the jobless markert. All I gotten from the hundreds of jobs I applyed for is two phone interviews and half the reply back that the position has been filled and or removed for what we know it as recetion.

      Thanks to the actions of the president and the greed ceo of companys the next position is sent over seas or given to a family memeber of an current employee.

    12. Janie, Florida says:

      I too am among the unemployed. We really need the extension. Some people up north are making over $400 week in unemployment benefits while people in this state can only get $275 if they are lucky to receive the max. This is crazy. After taxes, I am getting only $200 week. Cant live on that. Please, we need a extension to hold people up alittle while we desperately apply to all the companies on the internet for a job and til this crush is over. I need to pay a bill and eat some food.

    13. David, West Virginia says:

      Lets look at the math for a second, 1200 dollars a week employed or 400 dollars a week unemployed. Get a grip on reality.

    14. Catherine McEntee says:

      We spend billions to bail out companies like AIG and now the big three auto companies.

      There are no jobs out there. Every day we read about more companies laying off more and more workers. So we, the unemployed, are looking for jobs in an environment where layoffs are occurring daily. That's the reality of the situation. And now that regular people and not CEOs need help, we are told that we don't deserve that extra cushion when we are in such dire straits.

    15. romano, hollywood, f says:

      Increase and extend UI now, please. There are no jobs out there. Period. Do it now.

    16. retired at 24 says:

      real unemployment is 21% in usa as of july 26 2009

    17. Eddie ,CA says:

      Mr. Sherk,

      Would you please give up your job , and let someone who needs it,have it ? Then you can live on what unemployment pays in your state.You sound like a me first person and not one for the good of the whole.HEY YOU COULD BE NEXT ! If the middle class fails so will Wall St and the likes of you.

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