Massachusetts Fair Share

We stand up for a Massachusetts where everyone gets a fair shot, does and pays their fair share, and plays by the same rules.

Unemployment benefits don’t just help the jobless

By Jay Epstein

1.58% of the Massachusetts workforce is on extended benefits which expired late December, the second highest concentration in the nation.

1.58% of the Massachusetts workforce is on extended benefits which expired late December, the second highest concentration in the nation.

The holiday season is supposed to be a time of joy: spending time with one’s family, giving and receiving presents, singing Christmas carols, ringing in the New Year. This time of year is supposed to be the best (aside from the weather), but for many Americans the holiday season is giving them nothing but anxiety due to the expiration of Federal unemployment benefits.

Nearly 60,000 Massachusetts residents, and 1.3 million across the entire United States will lose unemployment benefits all because Congress adjourned without reauthorizing the extensions as part of the recent bipartisan budget deal. In other words, Congress just left for the holidays, basically putting all the jobless in this country on hold, as if they were the customer service department of your cell phone carrier.

Democratic leaders are pressing to restore the program (which passed the Senate on Jan. 7), but House Republicans are balking at the estimated $26 billion cost over two years. If the program is not extended, the Labor Department estimates that an additional 3.6 million people, including 141,000 in Massachusetts, would lose benefits next year. Meanwhile, corporate lobbyists are pushing state lawmakers to cut benefits at the state level. That would add further injury to the struggling unemployed.

The price of not extending unemployment benefits does not just effect the jobless though, it also effects those who have jobs. Cutting federal unemployment benefits is estimated to result in 240,000 jobs lost — 7,000 of those in Massachusetts.

Why the job loss? Unemployment benefits are immediately simulative – recipients need to spend that money when they get it. The money they spend helps everyone from farmers who grow crops, truckers who haul the crops to market, store clerks who ring the purchases up and bag them. Take this money out of the economy and demand suffers. When demand suffers, jobs are lost.

Obviously this job loss will effect economic growth that we desperately need. Both the Congressional Budget Office and JP Morgan estimate that the nation’s economic growth will drop between 0.2 and 0.4 percentage points. We should all be able to agree that this is the opposite direction in which our economy should be heading.

As one might imagine, people losing jobs does not just effect them, it effects those around them as well. In many cases, people who aren’t even old enough to work – children. The Council of Economic Advisers estimates that 3.6 million children will be affected by the loss of unemployment benefits by someone in their household. That’s food directly taken off the table – or never reaching the table to begin with.

A recent poll sponsored by Public Policy Polling (PPP) found that roughly two out of every three Americans favor extending unemployment benefits, including overwhelming majorities of Independents and Democrats, and a plurality of Republicans.

If Congress fails to extend unemployment benefits, it will not be the first time in recent years that its actions will have harmed our country’s economy. But hopefully, with enough voters back home watching, it will be the last.

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This entry was posted on January 7, 2014 by in Economy, Uncategorized.
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