Here Are The Facts On Unemployment Benefits
What’s the skinny on unemployment benefits?
What Are They?
Payments made by the government and other authorized bodies to unemployed people. The benefits themselves are very modest, averaging just $300 a week. However, only about 40% of the long term unemployed collect benefits.
How Long Do They Last?
State unemployment benefits are 26 weeks. Extensions have passed Congress 11 times since 2008 and led to a series of eligibility tiers. In the hardest hit states, they were extended to 99 weeks, but eventually cut back to 73 weeks.
Who Is Affected?
Since 2008, more than 24 million Americans have relied on long-term unemployment insurance. 1.3 million people will be affected by the extension of unemployment benefits. 1.9 million more will run out of state funded benefits in the first half of 2014 or approximately 72,000 Americans will lose benefits each week during the first half of 2014, based on Department of Labor data. 600,000 people have received long term unemployment benefits in the past 5 years. As the year goes on, the consequences the benefits for 3.6 million Americans will expire.
How Much Do They Cost?
The annual cost is approximately 25 billion dollars. The current 3 month extension of unemployment benefits being discussed in Congress now would cost approximately 6 billion dollars. States currently owe the federal treasury 38 billion.
How Bad Was It? How Bad Is It Now?
The unemployment rate has dropped from a high of 10% to 6.7%, but unemployment for 2.6% of the entire labor force has been long term (27 weeks or longer) discouraging many would be job seekers. The average time an unemployed worker is jobless is 35 weeks, and 37% of the unemployed have been jobless for 6 months or longer. This has discouraged many workers which has caused the labor force participation rate (the number of people who are either employed or are actively looking for work) to be at its lowest point in over 30 years.
Discouraged workers constitute one group of inactive work-seekers. These are persons who, while willing and able to engage in a job, are not seeking work or have ceased to seek work because they believe there are no suitable available jobs. This rate stands at 13.1 percent of the American work force, which is actually down from 14.4 percent a year earlier. Despite the economic progress made since 2008, there are still more than 1 million fewer jobs than there were before the recession began, and more than 4 million Americans have been out of work for six months or longer.
How Hard Is It To Get A Job?
A job vacancy is defined as a post, either newly created, unoccupied or about to become vacant, which the employer actively seeks to fill with a suitable candidate from outside the enterprise (including any further necessary steps) immediately or in the near future. An occupied post is a post within an organization to which an employee has been assigned. The job vacancy rate measures the percentage of vacant posts compared with the total number of occupied and unoccupied posts. The job vacancy rate is 2% with three employees per open position. It’s no picnic out there.
What Is Likely To Happen
It’s estimated that failing to extend unemployment benefits would cost 240,000 jobs in 2014. Additionally, the Congressional Budget Office and JP Morgan estimate that failure to extend benefits would lower GDP by .2 to .4 percentage points. The Federal Reserve announced in December it will begin to draw down its quantitative easing program by $10 billion a month starting in January, citing a stronger job market. Reducing the asset purchase program (currently 85 billion dollars per month) is posited to have an even greater effect than the extension of unemployment benefits.
