Unemployment extension critical

Added February 8th, 2010 by Peter Ruark | Email This Entry Email This Entry
Peter Ruark

Michigan has much to lose if Congress does not act quickly to renew the unemployment insurance (UI) extensions in last year’s economic stimulus bill.

It is not just because Michigan has led the country in the unemployment rate for 33 out of the past 36 months.

In December, Michigan and the nation entered the 24th month since the beginning of the 2007 recession. As this chart shows,  this marks the first time Michigan had a higher unemployment rate during the current recession (14.6 percent) than it did during the same month relative to the 1981 recession (14.2 percent in July 1983).

The early 1980s are well known as Michigan’s toughest times, as unemployment topped 16 percent several months in a row.  However, during the 24th month of the 1981 recession, the unemployment rate was on a slow but consistent downward slope, while the unemployment rate in recent months has barely dropped at all.

Because many workers have been unemployed for a very long time despite faithfully looking for work, unemployment insurance has been a crucial safety net. Many long-term unemployed workers have exhausted their regular benefits, and are only continuing to receive unemployment insurance because of the extensions in the American Recovery and Reinvestment Act.

Those extensions, however, will expire at the end of February. Without congressional reauthorization, unemployed workers who have not used up all their weeks of unemployment insurance will lose those unused weeks and will be left without any UI at all.

New numbers released last week from the National Employment Law Project  show that without Congressional action, nearly 62,000 jobless Michigan workers will become ineligible for federal unemployment benefits in March. By June, this number will swell to more than 225,700 unemployed Michigan workers. Congress must renew the extensions before Friday to continue the benefits without interruption.

Remember that the UI safety net not only helps unemployed workers and their families avert crisis, but is good for the state and local economies as well. When workers spend their unemployment checks on necessities such as food, clothing and household needs, it helps to keep local businesses thriving.

The Congressional Budget Office estimates that UI benefits generate up to $1.90 in GDP per every dollar spent, making the UI provisions a very effective economic stimulus.

Michigan cannot afford for Congress to let this lapse. Fortunately, the Senate leadership is hoping to get the bill to the floor this week, have an expedited debate, and pass it in enough time to get it over the House of Representative so that both Chambers of Congress can pass it before they recess on February 12.

Both of Michigan’s U.S. Senators are helping push this effort. This will ensure that the state unemployment offices keep the programs up and running without any interruption in benefits to workers.

— Peter Ruark

2 Responses to “Unemployment extension critical”

  1. ohiowfc says:

    Thank you for posting this Perter. I’m posting the link on our blog as well since Ohio and Michigan have much in common.

  2. […] of the blog entries have focused on federal legislation, such as the game of chicken that Congress played more than once by renewing benefit extensions at the last minute before […]

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