There is never a good time to be unemployed on your own. But the situation right now is one of the worst in decades. Four people are looking for work for every new job opening. With supply and demand so out of whack, it is not surprising that the average length of unemployment for a worker who loses their job is a little more than ten months. But in the middle of this worrying situation, conservatives in the House suggest that the government cut the amount of time people can get unemployment benefits by 40 weeks.
A recent poll of people who have been unemployed for a long time by National Public Radio and The Kaiser Family Foundation shows how bad it can be to be out of work in this economy and how far people would go to find a new job:
Seventy-four percent of people who have been out of work for a long time are pessimistic about their finances, and more than 60 percent aren’t sure they’ll be able to find a job with the pay and benefits they need to get by.
Only 22% of people who have been out of work for a long time are currently getting unemployment benefits. Among those who are, 94 percent think it is somewhat likely that their gifts will run out before they can find a new job. There is reason to be afraid. Eighty-four percent of the people who used to get unemployment benefits no longer do so because their benefits ran out.
Most people out of work would be willing to do almost anything to get a job. Eighty-seven percent would take an entry-level job in a different field, 68 percent would be willing to take a pay cut from their last job, and 44 percent would be willing to pack up and move to a new state if it meant they could find work.
What economists have been saying for a while is confirmed by these results. Long-term unemployed people are desperate to find work, their benefits are running out, and something needs to be done to help them in this tough economy.
Still, conservative politicians like Sen. Jon Kyl (R-AZ) have said that unemployment benefits make people less likely to look for work “because people are getting paid even though they are not working.” Recent research shows that this statement is false and contradicts itself because a person must be actively looking for work to qualify for unemployment insurance.
Jesse Rothstein, who used to be the Department of Labor’s chief economist and is now a professor of public policy and economics at UC Berkeley, just put out a paper that directly contradicts what Sen. Kyl said. Some researchers have said that extending unemployment benefits has added about 2.7 percentage points to the unemployment rate. Still, Rothstein found that giving unemployed workers more money only added about 0.3 percentage points to the unemployment rate. Less than half of this small effect was because people didn’t find new jobs, and there’s reason to think that “the availability of extended benefits might have raised the reemployment rates of displaced workers by keeping them from giving up their searches too soon.”
Let’s be clear: staying on unemployment insurance doesn’t make it harder for a worker to get a job again, and it can even help some workers who are already working keep their jobs. Businesses can’t hire more people if they don’t need them. People who get unemployment insurance are more likely to spend their money than to save it. This means they are putting money back into their local economies and helping other people keep their jobs. Every dollar spent on unemployment benefits makes the economy grow by two dollars.
In the United States, there are 13.3 million people who are out of work and looking for work and 7.1 million are getting unemployment insurance. If these benefits were cut, it would not only be bad for the people’s finances, but it would also slow down our country’s economic recovery as a whole.