Plan B Forum

More than a million Americans will lose their unemployment benefits after an emergency federal programme expires on Saturday.

Lawmakers failed to agree on an extension of the scheme before the US Congress began its winter recess.

Former President George W Bush introduced the assistance plan in 2008 at the start of the recession.

Under the programme, jobless people received an average monthly stipend of $1,166 for up to 73 weeks.

The White House says the benefits have kept millions of families out of poverty, but many Republicans argue that the scheme's annual $25bn price tag is too expensive.

The stalemate comes two months after a budget fight in the US Congress led to the partial shutdown of the government.

President Barack Obama has vowed to push for the renewal of the expired programme when Congress reconvenes in early January.

"The president said his administration would, as it has for several weeks now, push Congress to act promptly and in bipartisan fashion to address this urgent economic priority," White House spokesman Josh Earnest said.

An estimated 1.3 million people will initially be cut off with the end of the "emergency unemployment compensation", US officials say.

Millions more could be affected next year after they lose state benefits, which in many states expire after six months.

The financial aid was designed to help US citizens who lost their jobs during the recession and were unable to find new work while receiving the state benefits.

The US unemployment rate fell to a five-year low of 7% in November, according to the US Labor Department.

But the long-term jobless rate remains a problem for the economy, with some 4.1 million Americans currently out of work for six months or longer.

There has been repeated political wrangling between the Republicans, who control the lower house - the House of Representatives - and the Democrats, who have a majority in the upper house, the Senate.

Because of disagreements between the two houses over federal government spending, the US Congress failed to pass a budget before the fiscal year ended on 30 September.

Both sides eventually struck a last-gasp deal in October to end the federal shutdown and raise the federal debt limit.

rubato wrote:
References to the MOTU trivialize and dumb-down the discussion. Unfortunate.

rubato wrote:
References to the MOTU trivialize and dumb-down the discussion. Unfortunate.

Yrs,
Rubato

Lord Jim wrote:

rubato wrote: .......Anyone care to take rube to task for it?

The White House says the benefits have kept millions of families out of poverty,

I thought it was an opinion

Still, it's a bit of a prophecy is it not?

Seven things you should know about the expiration of unemployment benefits

By Brad Plumer
December 27 at 10:15 am

This Saturday, Dec. 28, an emergency unemployment insurance program will expire, immediately cutting off jobless benefits for 1.3 million workers who have been unemployed for longer than 26 weeks.

Here's our full primer on why this federal program is about to sunset and who will be affected. But it's also worth taking a step back and looking at the broader disaster of long-term unemployment in the United States. Here are seven reasons why this issue still very much matters:

1. Long-term unemployment is still at its highest level since World War II. There are currently about 4 million people who have been out of work for 27 weeks or longer. Although that's come down since the nadir of the Great Recession, the U.S. long-term unemployment rate is still the highest it's been since World War II:

The ranks of the long-term unemployed include all types of workers, according to a survey by the Urban Institute. There are young workers who have been out of work for more than 27 weeks. Married workers with kids. Older workers. College-educated workers. High-school dropouts. The problem touches nearly every demographic group you can think of.

2. Most of the long-term unemployed are having an extremely difficult time finding jobs. If you've been out of work for 27 weeks or longer, then you currently have just a 12 percent chance of finding a new job in a given month. And those odds go down the longer you're out of work:

Note that job prospects for the long-term unemployed are even worse today than they were in 2007. And the long-term unemployed have a much harder time finding jobs than those who have been out of work for just a few weeks.

Why is this? It's possible that the long-term unemployed are simply less employable. But there's also evidence that businesses actively discriminate against these workers. In one recent study, Rand Ghayad of the Boston Fed sent out a flurry of fictitious résumés to different employers, tweaking some of the characteristics of the applicants. He found that most employers won't even look at the résumés of the long-term unemployed, even if they're otherwise perfectly suitable.

One possible reason for this, as Michael Strain of the American Enterprise Institute points out, is that employers are leery of hiring the long-term unemployed because they assume there must be something wrong with these workers. Why else would they be out of work for so long? That may well be irrational. But there's little doubt that it's a huge obstacle for these workers.

7. All this long-term unemployment is destroying the U.S. economy. Earlier this year, three economists at the Federal Reserve published an unsettling paper arguing that the long-term productive capacity of the U.S. economy has been greatly diminished. The reason? Long-term unemployment:



The economists' argument goes like this: There are now millions of Americans who lost their jobs in the recession, often through no fault of their own, and they've now been out of work for years. Those workers have seen their skills atrophy, their networks fade, and many of them have dropped out of the workforce entirely, discouraged by their inability to find work. That, in turn, has weakened the total potential of the U.S. economy.

This is an extremely worrisome situation. It means that long-term unemployment isn't just a temporary ailment that will heal itself as the economy keeps rebounding. It has left permanent scars. The U.S. economy will never be as productive as it could have been had we figured out how to get people back to work more quickly. And those scars are still getting deeper.

This is an extremely worrisome situation. It means that long-term unemployment isn't just a temporary ailment that will heal itself as the economy keeps rebounding. It has left permanent scars. The U.S. economy will never be as productive as it could have been had we figured out how to get people back to work more quickly. And those scars are still getting deeper.

oldr_n_wsr wrote:So why not comment/opine about the thread topic rather than continue the sidetrack?

The only real answer is to get the economy going at a reasonable rate again, and there is a bit of hope in recent numbers.

Big RR wrote:"...

And that's the biggest problem, IMHO, in curtailing UI; we can force people who once had good jobs out of the job market and into minimum wage jobs, making it look like the economy and jobs are recovering, but saying it does not make it so, and pulling people out of their searches and into the minimum wage job helps no one in the long run.
... " .