|Page 2 of 2 <|
Are unemployment benefits no longer temporary?
States determine the amount of the benefits, but they average 36 percent of the average weekly wage, according to the National Employment Law Center. Recipients must look for work. Boyd said he has applied for 20 jobs in the past four months but has gotten only a few calls back. He has, however, looked only for jobs that pay above the minimum wage.
"I can't take something that's minimum wage because I just won't be able to pay my bills," he said. "I'd have to work three jobs to pay the bills, and that doesn't make sense."
Unemployment benefits were created as part of the Social Security Act of 1935, intended to provide the unemployed some portion of their income while helping the economy weather down times. Nearly two-thirds of the jobless collect unemployment benefits, which go only to those who have earned a certain amount of money in the previous year, and who lost their jobs through no fault of their own.
Unemployment compensation is funded largely through employer taxes (a few states require worker contributions). They have been extended in previous periods of unusually high unemployment, then rolled back when the rate declined.
Although the availability of long-term unemployment benefits "could dampen people's efforts to look for work," the Congressional Budget Office said in a February report, that concern "is less of a factor when employment opportunities are expected to be limited for some time."
The report went on to say that people receiving unemployment benefits tend to plow the money right back into the economy, making them "both timely and cost-effective in spurring economic activity and employment."
Today, the unemployed confront a changing workplace. The Obama administration has tried to address that by investing heavily in education, clean energy and scientific research, which officials say will create the jobs of the future. But that takes time, and jobs are being lost faster than new kinds can be created. That places unprecedented pressure on a program created to provide short-term relief while people waited for jobs to return.
"It is appropriate and natural for Congress to extend the time limit of unemployment insurance with the job market as bad as it is," said James Sherk, a labor economist at the Heritage Foundation. "But by quadrupling it, it is no longer an unemployment insurance program but a welfare program."
Phillip L. Swagel, a former Treasury Department official who is now a business professor at Georgetown University, said that some people might take longer to find a new job as a result of unemployment insurance extensions, but that right now it's a needed benefit.
"The reality is that it's hard to find a job even for people who really want one," he said.
But as the job market improves, Swagel said, unemployment insurance extensions must be pared back quickly, as they have been in previous downturns. "It's important to let the extensions lapse as the job market recovers -- to avoid having disincentives to work once the job market is better," Swagel said.
Jeffrey Carlson of Grand Rapids, Mich., a former insurance salesman and father of six, says he is motivated to find work, despite the $1,650 a month he collects in unemployment benefits. That money does not go far given his rent, child support, utilities and credit card bills. Carlson, 44, said he has applied for numerous jobs with no luck and has spent $40,000 in savings.
Carlson, who made $50,000 a year before he was laid off, said watching Bunning and other senators debate whether to extend unemployment benefits was painful and infuriating.
"I paid into the system for 25 years and now I need it," he said. "People are being put through the emotional heartache and anxiety of not knowing if it's going to keep coming. There are too many people who need it and are depending on it."
Staff researcher Magda Jean-Louis and staff writer V. Dion Haynes contributed to this report.