Unemployment benefits stop for 1.3 million Americans
MINNEAPOLIS (KMSP) -
Saturday, Dec, 28 marks the end of the federal government's "emergency unemployment compensation," meaning an estimated 1.3 million people will be suddenly cut off from their average monthly payments of $1,166.
The benefits enacted during the President George W. Bush administration were meant to be a cushion for unemployed victims of a recession whose state benefits expired.
Gene Sperling, the director of the White House's National Economic Council, said Friday that cutting off the benefits "defies economic sense, precedent and our values." President Obama wants Congress to pass a three-month extension as soon as they return next month.
END OF UNEMPLOYMENT: THE NUMBERS
99: Maximum number of weeks laid-off workers could qualify for
$1,166: Average monthly stipend
8,500: Number of Minnesotans to lose payments
214,000: Number of Californians to lose payments
11.4 million: People kept out of poverty by emergency unemployment
17 million: Number of children aided
$225 billion: Spending on unemployment benefits since 2008
$19 billion: Cost to restore 47 extra weeks of unemployment through 2014
PROS AND CONS
Michael Feroli, an analyst at JPMorgan Chase, said ending the extended benefits will lower the unemployment rate by half a percentage point as the long-term unemployed leave the labor force. Feroli cautioned the drop could be accompanied by a similar decrease in consumer spending.
Extending the program, on the other hand, would boost GDP growth by some 0.2 percent and increase full-time employment by 200,000 next year, the Congressional Budget Office estimated, but at the price of increasing the government's debt.