NCPA - National Center for Policy Analysis


March 10, 2010

Millions of Americans have been forced to rely on unemployment payments for extended periods as the nation struggles through its longest period of high joblessness in a generation.  Critics are taking aim, saying that the Depression-era program created as a temporary bridge for laid-off workers is turning into an expensive entitlement. 

  • About 11.4 million out-of-work people now collect unemployment compensation, at a cost of $10 billion a month.
  • Half of them have been receiving payments for more than six months, the usual insurance limit.
  • But under multiple extensions enacted by the federal government in response to the downturn, workers can collect the payments for as long as 99 weeks in states with the highest unemployment rates -- the longest period since the program's inception.  

The unemployed say extensions help to tide them over in unusually difficult times when jobs are hard to come by: 

  • Although unemployment held steady at 9.7 percent in February, millions of jobs have been lost in the downturn, particularly in the hardest-hit sectors including real estate, construction, manufacturing and financial services.
  • Those jobs are unlikely to return even when the economy recovers, many experts say.  

But complaints that extending unemployment payments discourages job-seeking have begun to bubble into the political debate, says the Washington Post: 

  • Sen. Jim Bunning (R-Ky.) recently single-handedly held up the latest extension, a bill to keep unemployment benefits in place for 30 more days, saying Congress should find other cuts to cover its $10 billion price tag.
  • Sen. Jon Kyl (R-Ariz.) did not join Bunning's effort, but he defended his colleague's point of view.
  • Kyl told the Senate he questioned why anyone would see unemployment benefits as helpful to the economy, or to the job market.  

"If anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work," Kyl said.  "I am sure most of them would like work and probably have tried to seek it, but you can't argue it is a job enhancer." 

Source: Michael A. Fletcher and Dana Hedgpeth, "Are unemployment benefits no longer temporary?" Washington Post, March 9, 2010.

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