One Million Americans Face Loss Of Jobless Benefits In January

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The National Employment Law Project says that the public’s perception of what will happen to insurance benefits for the unemployed early next year is flawed. Most press reports on Congressional action on the matter say that one million people have had their benefits extended well into 2010. That apparently is not so.

The NELP released a new analysis which finds that one million workers will become ineligible for unemployment benefits in January 2010 unless Congress reauthorizes the American Recovery and Reinvestment Act’s unemployment insurance programs by the end of December.

The organization writes “The critical benefits provided to jobless workers by the ARRA are set to expire at the end of the year, which means that even with the latest 14 to 20 week extension enacted in November, 30,000 workers a day will be left without any jobless benefits in January. By March, the number without federal jobless benefits will swell to nearly three million workers.”

It has been widely assumed that the benefits for many of the unemployed had already been extended by as much as several months. The New York Times points out the problem with that reasoning: “The added federal benefits were built on a series of previous extensions that are slated to end on Dec. 31, unless Congress renews these programs.”

The NELP analysis is devastating because it means that the “social safety net” for millions of people could disappear in the early part of 2010. That will almost certainly lead to a number of troubling consequences which will include a rise in mortgage delinquencies, adults who cannot regularly put food on the table, and an increase in ranks of the homeless who will need to rely on shelters or friend and relatives for a place to live and sleep. It also means that the tiny amount of money these people might have spent, a very modest addition to nationwide consumer activity, will go away.

The Obama Administration plans to have a jobs summit on December 3rd. The purpose of this is to draw together political and private sector leaders to discuss means for stopping the rise in joblessness which has taken national unemployment to 10.2% and which will likely stay above 10% for most if not all of next year.

The trouble is that the jobs summit comes a bit late. Any program that goes into effect will not clear Congress until early next year and the effects will almost certainly not be felt until the end of the first quarter. By that point, the economy could be in another rut caused in large part by a drop in consumer spending based on unemployment and the fear of many workers that they will join the jobless ranks soon.

There does not appear to be any solution to improving the employment situation without a second stimulus package, whether it is called that or not. Consumer spending, a rise in exports, and the $787 billion already being pumped into the economy have been inadequate. That does not leave many options beyond federal programs aimed very directly at putting people back to work.

Douglas A. McIntyre