Unemployment Assistance Needs to Go Farther
by Guest Blogger, 1/13/2003
With last week’s round of self-congratulating that followed the President’s signing of an extension of federally-funded unemployment benefits, one might think that the bill’s benefits would reach all unemployed workers in the country. Indeed, the bill’s signing came just in time for those workers whose regular (or state-funded) unemployment benefits ended December 28. Without the extension of the federally-funded “Temporary Emergency Unemployment Compensation” (TEUC), these workers would have been left with no assistance. Under the renewal of the TEUC, this group of unemployed workers will receive 13 weeks of federally-funded unemployment benefits, or up to 26 weeks, if they reside in states with exceptionally high unemployment rates.
According to a recent analysis by the Center on Budget and Policy Priorities (CBPP), however, the plan leaves 1 million unemployed workers without any form of assistance. These workers have been jobless for so many months that they have exhausted both their state unemployment benefits, as well as the federal benefits that kick in after the 26-weeks worth of state benefits expire.
Though House Speaker Dennis Hastert (R-IL) speaks for most when he says that the ultimate goal is to get workers “a pay check – not an unemployment check,” turning an economy with a 6 percent unemployment rate into a full employment economy will not happen overnight. In fact, the latest Labor Department statistics show that employers cut 101,000 jobs in December – and November’s numbers were revised to reflect that 88,000, not 40,000, jobs were cut. Faced with these numbers, some economists have been predicting that the unemployment rate may reach as high as 6.5 percent by summer.
Labor Secretary Elaine Chao attributes the further cut in jobs to employers’ unwillingness to hire workers until they see an increase in demand for their products. While this does argue for the need to get more money into the hands of consumers, it seems unlikely that spending $400 billion on the top 1 percent of consumers would be a very wise use of the country’s resources. To get a better return on our investment, we need to direct the funds to individuals and entities that will, out of necessity, spend the additional money immediately. These include low- and moderate-income earners and financially-strapped, over-burdened states.
For more on a variety of economic stimulus plans that propose to assist these groups, see this chart.