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Over 400,000 jobless workers already cut off Unemployment Insurance benefits, millions more to be dropped

By Masao Suzuki |
May 13, 2012
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San José, CA - In the first five months of this year, more than 400,000 jobless workers have been cut from collecting unemployment insurance benefits under the Federal Extended Benefits (EB) program. Another 100,000 will also lose their benefits when the EB program ends at the end of May, bringing the total to more than a half million unemployed who will be losing their benefits.

These workers have been unemployed for more than 79 weeks (about a year and a half). They have run through both the regular state unemployment insurance benefits, which last for six months, and the Federal Emergency Unemployment Compensation (EUC) program, which extends benefits for another year. The federal EB program adds an additional 13 to 20 weeks of unemployment insurance for jobless workers in states with high unemployment.

Back in February, Republicans in Congress forced the end of the federal EB program in exchange for voting for an extension of the EUC and also the payroll tax cut. But the entire federal EUC program is scheduled to end Dec. 31. This has the potential to cut off more than 2.5 million more unemployed from their benefits. With more than 12 million people officially out of work, and more than 7 million more working part time because they can’t find a full-time job, this is a terrible time to be cutting unemployment insurance. The average length of unemployment is still hovering around 40 weeks (almost ten months); jobless workers need the federal programs.

Because of these cuts, a smaller and smaller percent of jobless workers are collecting unemployment insurance benefits. From 2010 to 2011, the fraction of unemployed who were collecting benefits fell from 67% to 54% and by the end of this year less than half will qualify. If the EUC is not renewed by Dec. 31, then only about a quarter of the jobless will be able to collect benefits in 2013.

While federal unemployment insurance benefits need to be renewed and even extended, what is really needed is a federal jobs program. There are still more than three jobless workers for each job opening, and the economy still has 5 million fewer jobs than when recession began in December 2007. At the current rate of job creation, it will take about four years for the economy to gain back just the jobs that it lost, not to mention the millions of new jobs needed for young people coming into the labor force. Only a massive federal jobs program, like the Works Progress Administration (WPA) during the Great Depression of the 1930s, can bring millions of people back to work.

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