Study: Extending Benefits for Jobless Helps Us All

by James Parks, Dec 7, 2009

With 26 million people either unemployed or without fulltime work, labor commissioners and officials from eight states joined with workers and union and civil rights leaders in calling for Congress to extend unemployment insurance and health care assistance for  jobless workers, benefits that will expire for many in a few weeks.    

A new study, “Keeping a First Line of Defense for the Jobless,” released today, predicts that 1 million workers will become ineligible for unemployment benefits in January 2010 unless Congress reauthorizes key provisions in the American Recovery and Reinvestment Act (ARRA). The report also shows that by March that number will swell to more than 3.2 million workers. Click here to read the study.

Speaking at a press conference this morning, AFL-CIO Executive Vice President Arlene Holt Baker pointed out that jobless workers very quickly spend their benefits and the money quickly flows into and boosts the domestic economy. Every dollar the government provides for unemployment benefits is estimated to increase economic output by $1.63 to $2.15. Many economists agree, she said, that unemployment benefits provide one of the biggest “bangs for the buck” in terms of recovery spending.

Unemployment insurance is “the key safety net to help workers who have lost jobs through no fault of their own,” Holt Baker said, adding:

If Congress fails to reauthorize jobless benefits through 2010, foreclosures will happen at an accelerated pace, more families will fall off the financial cliff and more local businesses will lose revenues, leading to more job loss.

Workers of color are being pummeled by the recession. Unemployment for African Americans is now 15.6 percent and 12.7 percent among Latinos. Some 40 percent of African American and Latino workers will be unemployed or underemployed at some point in 2010.

Holt Baker pointed out that extending the lifeline for families hard hit by the recession is the first point of the AFL-CIO’s five-part plan for immediate job creation. The other four points are:

• Investing now to rebuild America’s schools, roads, sewers, parks and energy infrastructure, accelerating the shift to clean renewable energy;
• Increasing aid to state and local governments to maintain vital services and avoid unnecessary layoffs and tax increases;
• Putting people back to work in good jobs with good labor protections doing work that needs to be done, while making sure not to replace existing jobs; and
• Easing the credit crunch by using TARP funds to lend directly to small and medium-size businesses on Main Street.

The study was released by the National Employment Law Project (NELP), the Center for American Progress Action Fund and The Half in Ten Campaign.

The benefits provided by the American Recovery and Reinvestment Act include up to 73 weeks of federal unemployment benefit extensions and a subsidy covering 65 percent of the cost of COBRA premiums for unemployed workers.

Holt Baker sums it up this way:

The consequences of not acting are unthinkable.  We would see more lives put on hold, more homes lost and more communities threatened.

 The cost of not doing anything is far greater than the cost of continuing these essential benefits through the end of 2010. Extending unemployment benefits and COBRA coverage is the right thing to do—for the unemployed and for all of us.

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