WASHINGTON – Millions of Americans have been forced to rely on jobless benefits for extended periods, and critics are taking aim, saying 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, costing $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 economic downturn, workers can collect the payments for as long as 99 weeks in states with the steepest jobless 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 the jobless rate 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 joblelss benefits discourages job-seeking have begun to bubble into the political debate.
Sen. Jim Bunning, R-Ky., recently single-handedly held up the latest extension, a bill to keep unemployment benefits in place for another 30 days, saying Congress should find other cuts to cover its $10 billion price tag.
Andrew Stettner, deputy director of the National Employment Law Center, says there’s a good reason people are out of work for so long. There are six unemployed Americans for every available job, he said.
“The primary reason people are out of work so long is a lack of jobs,” Stettner said.
The 14.9 million jobless Americans have been out of work an average of 29.7 weeks, just below January’s 30.2-week average. Those levels are the highest since the government began keeping those records in the 1950s, according to Stettner.
States determine the amount of the benefits, but they average 36 percent of the average weekly wage, according to the National Employment Law Center. Recipients must look for work.
Unemployment benefits were created as part of the Social Security Act in 1935, intended to provide the unemployed some portion of their income while helping the economy weather down times. Nearly two-thirds of the jobless collect unemployment benefits, which go only to those who have earned a certain amount of money in the previous year, and who lost their jobs through no fault of their own.
Although the availability of long-term unemployment benefits “could dampen people’s efforts to look for work,” the Congressional Budget Office said in a February report, that concern “is less of a factor when employment opportunities are expected to be limited for some time.”
The report went on to say that people receiving unemployment benefits tend to plow the money right back into the economy, making them “both timely and cost-effective in spurring economic activity and employment.”
Today, the unemployed confront a changing workplace. The Obama administration has tried to address that by investing heavily in education, clean energy and scientific research, which officials say will create the jobs of the future. But that takes time, and jobs are being lost faster than new kinds can be created.
That places unprecedented pressure on a program created to provide short-term relief while people wait for jobs to return.
“It is appropriate and natural for Congress to extend the time limit of unemployment insurance with the job market as bad as it is,” said James Sherk, a labor economist at the Heritage Foundation. “But by quadrupling it, it is no longer an unemployment insurance program but a welfare program.”
