Emergency Unemployment Benefits Brief

Background:  Unemployment insurance (UI) is the federally supervised program under which states provide benefits to involuntarily unemployed citizens, typically for up to 26 weeks. The program serves as a safety net while the newly unemployed find a new job.

In response to the 2008 economic downturn, however, Congress dramatically extended this subsidized window to up to 99 weeks–nearly two years–in some states via the federally-funded Emergency Unemployment Compensation (EUC) and Extended Benefit (EB) programs. The emergency measure was implemented with the understanding that the UI timetable would eventually return to normal (hence its reliance on periodic congressional reauthorization). At the end of last year, Congress passed the Ryan-Murray Budget Agreement to set spending levels for the next two years. The deal did not include an extension of the crisis-level EUC benefits. Instead, all benefits returned to their status quo duration of 26 weeks on December 28, 2013. As in the case of other expanded entitlements, however, the Left has sought to make this emergency subsidy a permanent reality for jobless America via continued extensions.

Republican Senators Susan Collins (Maine), Dean Heller (Nevada), Rob Portman (Ohio), Lisa Murkowski (Alaska) and Mark Kirk (Illinois) joined five Senate Democrats to strike a bipartisan deal to extend the unemployment insurance program for five months–the legislation will soon be considered by the Senate in full. As the new program will cover retroactive benefits from December, the extension would expire for all beneficiaries in late May. The $9.7 billion compromise will extend to the 1.3 million people who lost benefits at the expiration date and be paid for by extending customs user fees through 2024, boosting federal revenue, and other accounting gimmicks.

Many conservatives have a number of policy concerns with any such extension:

Increased Unemployment:  By extending emergency unemployment, the government hampers the likelihood that the unemployed will find new work. According to a recent study from the University of Chicago, recipients of UI benefits must weigh several economic factors in their job searches. For example, a new position paying $600 per week may prove undesirable considering that after additional income taxes and the costs of employment, the UI recipient will only net an increase of 23 cents on the dollar from what he or she was paid without a job. By these figures, the unemployed are more likely to be selective in their search, take their time and not bother to consider remedies like relocation or industry transition. Prospective employers cannot afford to increase the base pay to hire them. Of course, the longer they are unemployed, the less likely they are to find work, as their skills are depreciated, thus bolstering unemployment.

Historically in the US jobs market, the length of time people are paid not to work bears direct relation to the quantity of unemployed. As Heritage Foundation Senior Policy Analyst James Sherk explains, “Economic research shows that each 13-week extension of UI benefits increases the average length of time workers receiving benefits stay unemployed by approximately one week.”

Disincentives to Work:  For every group of people who receive out of work subsidy, there is another group from whom the resources are taken. This creates a system in which work itself is the least valuable commodity. The person from whom the unemployment funds are taken is being penalized for having a job, while the person who is given those same funds is being rewarded for not having one. In equally effective ways, both parties are being discouraged from working. The more this practice metastasizes on the free-market, the more we can expect less work, less respect for work, and greater unemployment.

Taxpayer Burden:  Since the 2008 EUC Program went into effect, total paid unemployment benefits equals $252 billion. To extend the program for five months would rack up another $9.7 billion. American taxpayers cannot afford such an expense amid mounting deficits and a national debt in excess of $17 trillion.

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11 thoughts on “Emergency Unemployment Benefits Brief

  1. Pingback: Emergency Unemployment Benefits Brief | NoisyRoom.net

  2. Most of us are motivated by financial rewards generally associated with doing a good job at our work or career in other pursuits, entrepreneurial business, etc. In the beginning of unemployment there is also the emotional shock and then there’s the freedom associated with maybe sleeping a little later and taking time to “smell the roses.” Often its the marker for a different career direction as any of the above. However, there is ALWAYS the clear and present danger of financial extinction and the being left behind in learning new skills, the longer we are unemployed or inactive! With the specter of 99 weeks of unemployment benefits, it is hard to get focused and urgently motivated. Why not offer job counseling and education support in the first 16 weeks AND after the 26 if they still don’t have a job, they must find another source of financial aid. Otherwise, you are putting people automatically on a welfare program. NOT very inspiring and very depressing for many. Perhaps Receiving unemployment benefits should also require drug testing after the first 16 weeks?.

    • I wish people would stop repeating this “99 weeks” inaccuracy. This may have been true initially, but it was reduced considerably. But I guess if you yourself are not dealing with unemployment, accuracy is not a concern.

      Emergency Unemployment Compensation (EUC) Tiers for 2013
      Tier 1: 14 weeks
      Tier 2: 14 weeks if the state unemployment rate is 6% or higher
      Tier 3: 9 weeks if the state unemployment rate is 7% or higher
      Tier 4: 10 weeks if the state unemployment rate is 9% or higher

  3. Would like to hear your comments too! I have been unemployed more than once in the past and reported to and did my job search at Texas Workforce Commission and I am assuming that is still the requirement for us Texans?

  4. It’s terrible that the people who work all their life and lose their job at 61 years old. Slowly I watch him lose everything he owned to keep a roof. No one wants to hire him either he is to experienced or not enough. The point is it is his age. Then to make it worse they cut the unemployment keeping him alive! What to do?
    New Jersey

  5. Pingback: Extending Unemployment Benefits is the Wrong Thing to do | Observations From The Right

  6. I lost my job after 20months of employment of without a single corruptive action in my record with the company. Not even so much as a verbal warning.

    November 14, 2013 I was terminated from employment without having received a verbal warning, write-up, write-up with suspension or anything at all.

    Unemployment is denying my benefits and I am working around a 10 pound weight restriction for a back injury suffered while in the course of my employment with them. I worked the entire time with the injury even though the doctor wanted me out of work when I first suffered it. I wanted to work!

    Now I am unemployed they are denying my benefits and the registration on my car is out as of December. We just fall deeper. I was a hard worker, good at my job, loyal to the company and dedicated to my employees. I deserve to be paid unemployment, My appeal is today and they will probably show with lawyers and I will show alone. I don’t know what we will do if I am denied? The situation is dire!

    Why does the government DECIDE if we get unemployment anyway? It should be a find WE pay into as well as the employer and WE get based on how long we worked and what we earned. A system like this would make employers more likely to act fairly in regard to employee issues and hard working employees and their families would not be in a situation like we are now in!

  7. Any one who fail to pass this extension will be fired end of story, i would rather have obamacare then not have this extension

  8. I will not vote Tea party or republican if this bill is not passed, i was set to vote all Republican but i would rather have James clapper in there than them because they dont care about the people who put them there all they care about is the big businesses who send our jobs to china

  9. I Think The Republicans should help fellow Americans. The Perception of Republicans are they cannot relate to an average American.

  10. I got fired from my job March of this year and only been unemployment for six months and I been looking for a job and nothing yet now how am I gonna to survive and pay bills and take care of my kids u think it’s not fair so I’m trying to get a extension I hope I can get it.

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