Loss of jobless aid leaves many with bleak options

By Sam Hananel

Associated Press

Published: Sunday, Jan. 12 2014 10:01 a.m. MST

Because unemployment benefits require recipients to look for work, many who would have given up kept seeking a job. The federal benefits eased their financial hardship. But the fundamental problem goes beyond unemployment aid: A shortage of decent-paying jobs for those still coping with the aftermath of the Great Recession.

Jesse Rothstein, an economist at the University of California, Berkeley, who has studied the long-term unemployed, has found that extended benefits help both the recipients and the economy — by fueling consumer spending.

"A Band-Aid doesn't heal a serious wound, but that isn't much of a reason not to use one," Rothstein says.

The trend of people ending their job hunts once their benefits expire has already emerged in North Carolina, which started cutting off aid in July. North Carolina's unemployment rate sank from 8.8 percent in June to 7.4 percent in November, but mainly because people stopped their job searches.

But some congressional Republicans argue that guaranteed unemployment checks that go on for more than a year lead many workers to take excessive time to try to land an ideal job, instead of settling for whatever they can find.

Senate Democrats and President Barack Obama have pushed to restore the program. But they need to agree on how to pay for it— a key demand from Republicans concerned about a potential $20 billion hit to the deficit.

The longer people remain jobless, the more likely their skills are to erode and the more likely employers are to ignore their resumes, according to economic research. The result is that many eventually stop looking for work and turn instead to other government programs such as Social Security Disability Insurance.

"If those workers don't ever get back, they're not going to be earning income, they're not going to be paying taxes," says Josh Mitchell, an economic researcher at the Urban Institute.

Compared with people who've been out of work for weeks, the long-term unemployed tend to be older and more concentrated in manufacturing and construction, according to research by Mitchell.

A majority of the long-term unemployed have children. An increasing share — 28.6 percent vs. 24.2 percent in 2007 —attended college but didn't receive a degree. And most live in the South and West, where the housing bust that sparked the recession was most intense.

About 37 percent of all unemployed workers — or 4.1 million — have been out of a job six months or more. That's nearly double the proportion it was when Congress previously ended emergency benefits in 2003 and in 1994, notes Heidi Shierholz, an economist at the liberal-leaning Economic Policy Institute.

But many workers say they would rather have jobs than more benefits.

"It's just been a struggle forever," says Blevins, the laid-off machine operator. "I don't want nothing for free."

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