Wednesday, March 5, 2014

The End of Emergency Unemployment Compensation - Who Is It Hurting?

The loss of Emergency Unemployment Compensation (EUC) is starting to impact more and more unemployed Americans thanks largely to inaction by the Senate and the House.  Studies show how this impact will grow over the coming year, ultimately impacting millions of jobless workers.

Let's open by looking at the benefits of EUC according to the White House:

1.) 23.9 million workers have received extended UI benefits.

2.) Roughly half of recipients have some college education.

3.) 4.8 million recipients have a bachelors degree or higher.

4.) Including the families of workers, nearly 69 million people have been supported by extended UI or just over one in four Americans.

Here is a graph showing how the cumulative number of EUC recipients has slowed down somewhat since the inception of the program in 2008:

Even though the number of new EUC claimants has declined, growth in new claimants is still quite high, particularly considering that we are five years into the "recovery".

Here is a graph showing how the average length of unemployment is still at extremely high levels compared to all other recoveries:

In January 2014, an average unemployed American worker was jobless for 35.4 weeks, down from just over 40 weeks in late 2007.  Unfortunately, this is more than double the average of 15.2 weeks going all the way back to the beginning of 1948!  This suggests that the problem for long-term unemployed workers in the United States is only going to get worse as time passes unless an extension of EUC is passed.

According to the Centre on Budget and Policy Priorities, an estimated 1.3 million workers were cut off in December 2013 alone when the program expired.  This will grow to 3.2 million by June 2014 and 4.9 million workers by the end of 2014 as shown on this graph:

The National Employment Law Project approaches the situation somewhat differently but comes up with the same conclusions.   They estimate that by March 15th, 2014, 2.126 million long-term unemployed will have lost coverage by EUC, rising to 2.341 million by April 5th, 2014.  An estimated 72,000 unemployed workers lose their state unemployment insurance every week.

As shown on this graphic, the impact on the children of unemployed Americans is starting to climb as well:

By April 15th, 2014, it is estimated that there will be 1,208,096 children that have been impacted by the loss of parental EUC.

Here is a chart showing the number of unemployment claimants that will be impacted by a loss of federal jobless benefits for each state:

You will note that the total benefits lost to claimants by April 5th will be $5.411 billion.

Congressional Democrats are pushing for a six-month extension to EUC through H.R. 3936; previous attempts have been thwarted by Republican filibusters in the Senate.  H.R. 3936 or the "Emergency Unemployment Compensation Act of 2014" was introduced on January 28, 2014 and was referred to Committee.  GovTrack estimates that there is a 2 percent chance of H.R. 3936 getting past Committee.  Bill S. 1845, attempting to achieve the same thing in the Senate, failed cloture on February 6, 2014 and could not move past a Senate filibuster because it did not receive the 3/5ths of the vote necessary to proceed (the vote was 55 to 43 with Republican Senators voting overwhelmingly against S. 1845). 

It is interesting to note that the Congressional Budget Office estimates that, with an extension of EUC, inflation-adjusted GDP will be 0.2 percentage points higher and full-time equivalent employment will increase by 200,000 in the fourth quarter of 2014.  On the downside, the program would result in a net increase in deficits of $25 billion over the period from 2014 to 2023, chump change compared to what Washington can waste on any given day.

I want to close by looking at one group that has been particularly hard-hit by the expiring EUC benefits.  According to the Center on Budget and Policy Priorities, over the past three years, 9.7 percent of unemployment recipients that were looking for work between 27 and 73 weeks after they lost their jobs were veterans.  With about one in 10 EUC recipients being a veteran, this means that nearly 200,000 veterans have lost their benefits by the beginning of March 2014.  

Sometimes, you have to wonder how some of Washington's elite can live with themselves.  Perhaps Neflix and its iteration of House of Cards is more realistic than we'd hoped.


  1. I don’t really know how unemployment works and what happens when you no longer get it. I assume you still receive welfare and snap benefits. Not sure how far that amount of money will stretch, but then of course there is section 8 to provide housing. I know living on welfare is no easy task, but if these people don't do something for work it’s on them. My guess is a lot of these long term unemployed are hoping to go back to work and get paid close to what they made in the job they lost. But unfortunately that’s not reality in the New America, reality is finding a 10$ an hour job is the best you probably can do. In time you might be able to find something paying alittle more but 30$ an hour office jobs, manufacturing jobs, and middle management positions are just not out there anymore.

  2. One of the biggest problems is the fact that there are simply not enough jobs being created for the number of workers looking. I posted on that subject here:

    Thanks for your comment.