Help the Jobless

Extending benefits would be economically smart.

ANY RATIONAL system of unemployment insurance has to balance the need to help workers who through no fault of their own find themselves unemployed against the risk that the benefits will be so generous that they dissuade people from finding new jobs. That's why it makes sense to limit benefits to a particular period; ordinarily, workers are entitled to six months of unemployment benefits. During economic downturns, when jobs can be hard to come by for even the most diligent seekers, the compassionate -- and economically sensible -- response is to temporarily extend the period of eligibility.

Congressional Democrats are poised to do that, adding a provision to the Iraq war spending bill that would extend unemployment benefits for an additional 13 weeks. The Bush administration and congressional Republicans contend that this step, which would cost an estimated $13 billion, is unnecessary because the unemployment rate, 5 percent in April, is not high by historical standards.

Unemployment, though, is up sharply from 4.5 percent a year ago; it is higher than the average for the beginning of a recession, which is where the country might be now. Moreover, the average duration of unemployment (17.5 weeks) is longer than at the start of the two previous recessions (12.6 weeks in 2001, 11.9 weeks in 1990). The share of workers suffering long-term unemployment -- that is, who remain jobless after their six months of benefits run out -- is nearly 17 percent, higher than the 11 percent at the start of the 2001 recession and the 9.8 percent at the start of the 1990 recession. In fact, those percentages may be artificially low because they fail to include those who have given up looking for work.

Meanwhile, benefit levels hardly provide a huge incentive for slackers; they average about 10 percent less than the poverty rate for a family of three and replace just over one-third of workers' previous wages. Extending unemployment benefits also serves as a particularly efficient stimulus for a stalled economy. The increased benefits are temporary; they are targeted to those most likely to plow the money back into the economy. In the longer term, Congress needs to look at overhauling unemployment insurance to reflect 21st century needs. In the shorter term, extending benefits is the right thing to do.