Media's Latest Unemployment Myth: Benefits Have Gone On Too Long
Right-wing media voices have coalesced around the myth that unemployment benefits to the long-term unemployed do not need to be extended because the economy is improving and benefits have existed for too long. These arguments, however, ignore key realities about long-term unemployment, namely that it remains elevated despite an improving economy.
Congress Attempting To Restore Long-Term Unemployment Benefits
Reuters: Bipartisan Effort To Restore Expired Long-Term Unemployment Benefits Emerges. According to a report by Reuters, one of the top items in the 2014 legislative agenda is a bipartisan effort to restore long-term unemployment benefits, which lapsed on December 28, 2013:
"We are trying to catch up with what the American people have known for years - that they are working more for less," Democratic Senator Jack Reed of Rhode Island said in an interview.
Reed is a leading advocate of a minimum wage increase and, along with Republican Senator Dean Heller of Nevada, is sponsoring a bill to restore jobless benefits for 1.3 million Americans and prevent thousands more from soon losing such aid.
The Reed-Heller measure would extend for three months the Emergency Unemployment Compensation program, which ended on Dec. 28 when its funding expired. [Reuters, 1/5/14 ]
Myth: Emergency Unemployment Compensation Has Gone On Long Enough
Fox Contributors George Will And Charles Krauthammer: This Program Was Supposed To Be "Temporary." On the January 2 edition of Fox News' Special Report, contributors George Will and Charles Krauthammer questioned the integrity of extending a so-called "temporary" benefit program. Will bemoaned that, at this rate, the program was "going to go on forever," while Krauthammer demanded any extension of the insurance benefit have a built-in "wind down, so there is a final date under which the 'temporary emergency program' finally ends." [Fox News, Special Report with Bret Baier, 1/2/14]
Fox Host Gregg Jarrett: "These Extensions Were Meant To Be Temporary... At What Point In Time Is Enough, Enough?" On the January 4 edition of Fox News' America's News Headquarters, host Gregg Jarrett was joined by guests Martha Zoller and Doug Schoen to discuss a bipartisan effort to reinstate long-term unemployment benefits, which lapsed on December 28. Jarrett opened the segment by claiming "these extensions were meant to be temporary" and asked "at what point is time is enough, enough?" Later in the segment, Jarrett argued that if such a policy decision caused undue hardship to working Americans and their families, "that's life:"
JARRETT: If the government stops supporting people with checks... those people are going to have to make tough decisions. You know, lower wages, change careers or jobs, take a job you don't want, but you know what? That's life. [Fox News, America's News HQ, 1/4/14 ]
Wall Street Journal: Benefits Already Extended "Up To 99 Weeks." A December 11 editorial in The Wall Street Journal questioned the need for a further extension of jobless benefits at a time when the national unemployment rate was down to 7 percent. The Journal argued that the program keeps workers unemployed by removing their incentive to find employment, ignoring that recipients of unemployment insurance must show that they are actively looking for work to receive benefits.
Maybe it's time to consider whether the big expansion of unemployment insurance has increased joblessness. In 2009 the Obama Administration and Congress extended jobless benefits for up to 99 weeks. The point was to help people through the recession, but now the jobless rate is 7%, down from 10%, and the White House still wants another extension.
[T]he current system provides as much as two years of benefits for not working and raises payroll taxes on employers even as some 20 million Americans are still unemployed, underemployed or discouraged from looking for work. None of this will help the economy create more jobs, which is what the jobless need far more than another government check. [The Wall Street Journal, 12/11/13 ]
Fox & Friends: The Recession Is "Long Gone" So Why Continue Extending Benefits? On the January 6 edition of Fox News' Fox & Friends, co-hosts Steve Doocy and Brian Kilmeade argued that the job creation and economic growth witnessed over the past several years indicates that a further extension of unemployment insurance is unnecessary. Kilmeade asked if struggling job seekers should "really expect to get insurance for two full years," while Doocy argued that with the recession "long gone" the time for extending benefits had passed. [Fox News, Fox & Friends, 1/6/14 ]
Fact: It's Not About The Calendar, It's About The Economy
CBPP: Long-Term Unemployment Still Far Higher Than Previous Recoveries. In a December 6 statement regarding the Labor Department's latest employment report, economist Chad Stone of the Center on Budget and Policy Priorities highlighted the elevated levels of long-term unemployment in the current labor market compared to previous recessions and recoveries. His findings show long-term unemployment in 2013 nearly twice as high as previous recovery periods when temporarily extended jobless benefits expired. [Center on Budget and Policy Priorities, 12/6/13 ]
CBO: Extending Unemployment Benefits Boosts Job Creation, Economic Growth. In a December 3 response to an inquiry from Representative Chris Van Hollen (D-MD), the non-partisan Congressional Budget Office concluded that extending emergency unemployment compensation (EUC) through the end of 2014 would positively impact economic growth and job creation in the short term:
Combining the positive effects on the economy from higher aggregate demand with the negative effects from job searches that would be (on average) less intense, CBO estimates that extending the current EUC program and other related expiring provisions until the end of 2014 would increase inflation-adjusted GDP by 0.2 percent and increase full-time-equivalent employment by 0.2 million in the fourth quarter of 2014. [Congressional Budget Office, 12/3/13 ]
EPI: Unemployment Expiration Will Cost Economy 310,000 Jobs. A November 7 report by the Economic Policy Institute concluded that extending unemployment insurance benefits through 2014 would support up to 310,000 jobs, and that without an extension of the jobless benefit program those jobs would be lost. The report further concluded that the actual price of extending the benefit program for another year is much less than its line-item budget due to the effect it would have in boosting economic activity and decreasing dependence on other forms of government anti-poverty relief:
The actual net cost of continuing the UI benefit extensions is far less than the $25.2 billion "sticker price." The 310,000 jobs created or saved by the economic activity this spending generates will in turn generate greater federal revenues from the taxes paid on the wages earned by those who otherwise would not have jobs. They will also save the government money on safety net spending related to unemployment (for example, Medicaid and food stamps). In other words, when people have jobs, government revenues increase and government expenditures go down. [Economic Policy Institute,11/7/13 ]
CBPP: Economy Cannot Afford To Cut Unemployment Benefits. In a November 20 report by the Center on Budget and Policy Priorities, senior economist Chad Stone discussed the urgency of renewing long-term unemployment compensation. Citing numerous lagging labor market indicators -- including a drop off in labor force participation and that the current rate of unemployment is nearly two points higher than the unemployment rate when the recession began -- the report concludes that unemployment insurance has a positive impact on the economy. Crucially, the report concludes that extending unemployment benefits does not increase joblessness or discourage workforce participation. [Center on Budget and Policy Priorities, 11/20/13 ]