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Millions of Unemployed Workers Face Threat of Jobless Aid Cutoff

Photo by Blue Jay Day/Flickr

Nearly 2 million long-term jobless Americans will lose their unemployment insurance lifeline just days after Christmas if Congress doesn’t act to renew the federal unemployment insurance program for job seekers out of work six months or longer. The program expires at the end of the year.

Christine Owens, executive director of the National Employment Law Project (NELP), says if long-term jobless aid ends, “the basic economic security floor will be ripped from under 2 million unemployed workers.”

Families depending on unemployment insurance to get by are probably already cutting back, knowing that the benefits may not be there next year. Losing this lifeline during the holiday season will be devastating to individuals and families for whom federal benefits provide a small measure of economic security and a crucial bridge to re-employment. 

Both Owens and AFL-CIO President Richard Trumka say the drop in the jobless rate to 7.7% announced today is good news, but it can’t  overshadow the huge problem of the nearly 5 million long-term unemployed workers. Says Trumka:

Even with renewed job growth in recent months, we remain years away from regaining all the jobs lost during the Bush recession and financial crisis. Extending Unemployment Insurance to protect a lifeline for unemployed workers is critical.

Owens notes that the economic impact of allowing the long-term jobless help to expire goes beyond the pain it would cause individual families. 

The corresponding reduction in consumption resulting from the cut-off of benefits threatens the already fragile recovery.

It would, according to NELP, reduce economic growth by $48 billion next year, resulting in a loss of hundreds of thousands of jobs. Eliminating federal unemployment insurance benefits would cost retailers alone more than $16 billion in 2013. 

The cutoff would leave the unemployed with no further jobless aid beyond the 26 weeks states typically provide, even though the average unemployed worker is out of work for roughly 40 weeks, and there are more than three unemployed workers for every one job opening. 

Find out more in this fact sheet from NELP on the looming expiration of federal unemployment insurance.

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