benefits for those experiencing long-term unemployment. Some 1.3
million Americans saw such benefits expire on December 28.
WASHINGTON — A move to renew emergency benefits for the long-term
unemployed passed a key procedural vote Tuesday, as 60 US senators
voted to move forward with debate on the measure.
If the Senate approves the measure, it remains unclear whether the
Republican-led House will follow suit.
The basic question at issue, economically, is whether the challenge of
long-term unemployment is still big enough to warrant “emergency”
response. That raises the question: Just how many would-be workers are
unemployed for lengthy periods these days?
The answer is a lot, even using the Labor Department’s official tally
of the unemployed. And the number goes higher, because not all the
long-term jobless are included in that mainstream count.
Some 1.3 million Americans who have been out of work at least 26 weeks
saw emergency benefits run dry on Dec. 28, when year-end budget talks
left the program an unresolved issue and it expired. By some
estimates, another 3.6 million people are likely to enter the ranks of
the long-term unemployed (and to be eligible for the benefits if they
reappear) at some point during 2014.
The total number of long-term unemployed goes beyond those eligible
under an emergency benefits program, economists say. Consider that the
program’s 1.3 million beneficiaries, late in 2013, were just a
fraction of the 4.1 million people whom the Labor Department counted
as unemployed for more than 26 weeks. That larger group includes
people who have already exhausted the extended benefits. Beyond the
official long-term unemployed, more than 760,000 others are counted by
the Labor Department as “discouraged,” meaning they have stopped
looking for work.
That’s the backdrop for the current situation, in which many
labor-market experts on both the left and right are supporting the
restoration of emergency benefits.
“Simply put… it’s much harder for the long-term unemployed to find a
job right now than it has been in the past when emergency federal
benefits were allowed to expire,” writes Michael Strain of the
conservative American Enterprise Institute in Washington.
The rationale behind unemployment insurance (UI) is to cushion workers
and their families during the time it takes them to find a new job. In
the current climate, another rationale for extending benefits is
simply as an incentive for the jobless to not give up hope.
“It keeps them in the labor force looking for work,” says Chad Stone,
chief economist at the liberal Center on Budget and Policy Priorities
in Washington. People must keep up the job search to collect the
By contrast, dropping out of the job market tends to damage people’s
earning prospects when they eventually try to jump back in, economists
say. When that happens to a lot of Americans at once, it means lower
productive potential for the whole economy.
“If we let emergency federal UI benefits expire, then the best guess
based on the research is that more long-term unemployed workers will
simply quit looking for a job and exit the labor force than will take
a job they have been too choosy to take,” Mr. Strain wrote recently in
the National Review.
Usually, the federal-state program called unemployment insurance
provides income support for up to 26 weeks (half a year) after someone
loses a job. The Labor Department considers anyone out of work longer
than that, and actively on the job hunt, as among the “long-term
The Emergency Unemployment Compensation, or EUC, program, which was
launched in 2008, makes jobless benefits run as long as 73 weeks per
person in states with very high unemployment rates.
Some good news: America’s unemployment rate is now down to 7 percent
of the workforce, as of November, well below its 10 percent
But the progress still leaves long-term unemployment much higher than usual.
The long-term unemployed alone account for 2.6 percent of the U.S.
labor force. That’s down from a post-recession peak above 4 percent,
but it’s still far higher than the number usually is even in the
depths of a recession.
The benefits typically pay an amount equal to about half a worker’s
Progress in the overall job market, meanwhile, can mean the emergency
benefits for individual workers shrink. That’s because the law works
on a formula where the duration of benefits hinges on a state’s
In most states, unemployment has fallen enough that, if the emergency
benefit is renewed, it will mean individuals have aid for 40 to 63
weeks, not the 73-week maximum.
Even before the EUC program expired in December, only 41 percent of
unemployed workers were eligible for and receiving either state or
federal jobless aid, down from 65 percent 2010, according to the
National Employment Law Project, which is pushing for Congress to
extend the benefits.
This shift is occurring even though it’s still taking people much
longer than normal to find new jobs.
The average duration of unemployment was 37 weeks as of September 2013
— more than 20 weeks longer than pre-recession levels, and down by
only 1.2 weeks since the end of 2012, the National Employment Law
All this helps explain why some Republicans joined Democrats in the
Senate to move forward with debate on restoring EUC.
Many Republicans in Congress argue that extending the benefits again
should be contingent on making sure the move doesn’t add to federal
deficits — such as by finding new spending cuts to offset the cost.
One lingering question is how many long-jobless Americans have dropped
out of the labor force. Although the Labor Department counted 762,000
of these “discouraged” workers in November, some economists point to
declining participation in the labor force as a hint that the number
may be higher.
If the participation rate matched pre-recession levels, some 5 million
additional Americans would be in the labor force today. But it’s hard
to know how much of this post-recession decline is due to the weak job
market and how much is due to baby-boom demographics, as growing
numbers of adults turn 65.
Federal Reserve Chairman Ben Bernanke told a gathering of economists
in November that the Fed will be looking for clues on this point as it
weighs whether the economy and job market are returning to health over
the next couple of years.
What’s clear, though, is that the problem of long-term joblessness