Extended Unemployment Benefits Expired Despite Unprecedented Labor Market
by Jessica Schieder, 1/9/2014
A proposal to extend unemployment benefits for three months passed a procedural hurdle on Tuesday, after six Senate Republicans joined Democrats to move the measure. Nonetheless, obstacles remain to the extension’s passage in the Senate, before a January 15 deadline on government spending legislation.
Extended unemployment compensation has been used historically to mitigate the impact of high unemployment on the economy during economic downturn. More than 240,000 jobs could be lost in 2014 without the extension of unemployment benefits, according to the White House, potentially further reducing demand and weakening the labor market.
Congress has never before allowed extended benefits to expire with unemployment at today’s levels regardless of administration. As the Economic Policy Institute pointed out in a recent blog, the expiration of these benefits is especially remarkable given the record levels of long-term unemployment in the country (see chart below).
Without action, an additional 1.9 million individuals actively seeking jobs will be denied emergency unemployment compensation by the end of June—eliminating a life line in a job market where there are 3 people competing for every available job.