Jobs Report Highlights Need to Continue Expanded Unemployment Benefits
Posted by: Mitchell Hirsch on Nov 05, 2010
The employment report for October showed the economy adding jobs for the first time since May, but at an insufficient pace to bring down unemployment. The official unemployment rate remained at 9.6% despite the addition of 151,000 jobs. 14.8 million Americans were unemployed last month, with the average duration of unemployment increasing to 33.9 weeks. Those out of work for six months or more increased as well, to more than 6.2 million workers.
Two million workers will be cut off next month alone if Congress fails to act, resulting in hardship for families and businesses alike during the holiday season.
“Today’s job report is another reminder of how far we have to go to get the economy back on track and turn things around for America’s workers. Congress doesn’t have to be a lame duck—it can make a huge impact now by renewing for another year the jobless benefit extensions that expire on November 30th. If Congress fails to act, two million workers will be cut off next month alone—in the heart of the holidays—and any brief stopgaps will still put millions at risk of cut- offs next year. Congress simply cannot pull the plug on families and businesses if it has any realistic intention to turn things around,” said Christine Owens, executive director of the National Employment Law Project.
In 2010, benefit extensions have already helped 9.5 million job seekers and their families and pumped roughly $6.8 billion into the economy every month. With average unemployment still extremely high, any lapse or cuts in benefits now would strike a major blow to workers and businesses during the holiday and retail season and create more obstacles to growth in 2011.
An accompanying NELP Fact Sheet details the "the dire state of the economy and jobs market," noting:
- The economy is in a jobless recovery: economic growth, while still positive, has actually been declining over the past year, resulting in a dearth of new private-sector jobs.
- There are currently not nearly enough jobs to go around. Even if all current jobs openings were filled by jobless workers, 11 million unemployed would remain without work.
- Hiring is slow and inadequate, and will likely remain weak in the near future.
- Unemployment will remain high through 2011.
In a rather sobering assessment, economist Heidi Shierholz at the Economic Policy Institute today wrote:
...given the backlog of 14.8 million unemployed workers in this country, the pace of job growth is not strong enough to bring the unemployment rate down to pre-recession levels anytime soon. To give this some context: If the rate of job growth were to continue at October’s rate, the economy would achieve prerecession unemployment rates (5% in December 2007) in roughly 20 years. (emphasis added)
That evaluation was echoed by Nobel Prize-winning economist and New York Times columnist Paul Krugman on his blog:
...with total employment still 7 1/2 million less than it was three years ago, we had job gains slightly higher than the number needed to keep up with population growth.
At this rate we’ll return to full employment around 2030 or so.
In this dire economic context, the continuation of the federally-expanded unemployment insurance programs through 2011 becomes all the more urgent. As NELP Executive Director Christine Owens said today:
“When Congress returns November 15th, it will have barely two weeks to act to avoid a catastrophe for unemployed workers. We need to generate jobs and spending to turn this ship around, and federal benefit extensions help accomplish exactly that. Congress has never cut support to the jobless with unemployment so high—to do so now would be a punch in the gut to millions of families and businesses fighting to stay in their homes and stay afloat. Congress will have to act quickly before November 30th,” said Owens.
President Obama is already urging the Congress to continue the unemployment insurance programs, as we reported here Wednesday, saying:
“I think it makes sense for us to extend unemployment insurance because there are still a lot of folks out there hurting . . . . Not only is it the right thing to do for folks who are still looking for work and struggling in this really tough economy, but it’s the right thing to do for the economy as a whole.”
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