I was functionally unemployed for about two and a half years, starting just before the economic malaise that’s affected just about everyone else around this country in one way or another. There are a few lasting effects from such a long period of unemployment and from the downturn in the economy. One of them is that – still – I have no full-time job. Little-to-no benefits. All told, I’m making about a third of what I was making before, if I’m lucky.
Extending the federally funded unemployment insurance extensions through 2011 would not only be a lifeline to the families of millions of unemployed workers, it also supports spending responsible for the existence of nearly half a million jobs. Furthermore, it would not only create new jobs, it would boost hours for workers who already have jobs. Both results would be welcome improvements because this recession has seen both job losses and cuts in hours for those with jobs… We find, using the CBO’s methodology, that the $65 billion spent on unemployment insurance extensions through 2011 would support 723,000 full-time equivalent jobs.
So what’s to keep the US from extending the benefits? Perhaps the $65 billion price. So, single banks can afford to receive that money for use from the government, but spread out through millions of households on Main St.? Can’t let that happen… Nevertheless:
The actual cost to the budget is far less than the sticker price of $65 billion. The 723,000 full-time- equivalent jobs created or saved means: (1) the government will bring in more revenue from the taxes paid on the wages earned by those who otherwise would not have jobs, and (2) it will spend less on safety net measures (for example, Medicaid and food stamps) related to unemployment. In other words, when jobs are created, it adds to government revenues and reduces government expenditures. Using a methodology described in Mishel and Shierholz (2010), we find that of the $104.7 billion increase in GDP related to continuing the unemployment extensions through 2011, some 37.4%, or $39.1 billion, will be recouped both in higher revenues, as more people and firms pay taxes, and in lower expenditures. Consequently, the effective cost to the budget of continuing the unemployment insurance extensions for a year is $25.9 billion instead of $65 billion.
Seventy-three percent of voters want Congress to keep the extended unemployment benefits put in place to fight the recession, according to a new poll commissioned by the National Employment Law Project, and they don’t care about the deficit.
With unemployment expected to hover above nine percent for the foreseeable future, nearly three out of four voters say “it is too early to start cutting back benefits for workers who lost their jobs.”