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(Washington D.C.)- The House of Representatives approved an additional 13 weeks of benefits for people in states with unemployment rates above 8.5 percent. The legislation passed by a vote of 331 to 83.
“Almost 15 million are unemployed, the greatest number since 1939,” said Rep. Levin. “We can tell these people to ‘get looking,’ ‘get lost,’ or ‘get some help.’ They are already looking, so it’s a question of whether we are going to get them the help they need.”
In Michigan 25,500 will lose benefits by the end of September, 62,700 by the end of the year, without an extension. Rep. Levin shared the story of Larry Szpanelewski, a resident of Madison Heights, on the Floor of the House during debate on the legislation.
“You know, I never thought this would happen to me,” Mr. Szpanelewski had said in a phone call. “I have never been unemployed before. This economy is unlike anything I could ever imagine. I am very grateful for each extension of benefits. But I really want to get back to work. There is this misconception that people like me are sitting back and waiting for the next unemployment check. I really really want to get back to work. I want to get back to doing my part and earning a paycheck. This [unemployment] is agony, it really is. I’m just waiting for the right phone call: ‘Come to Work.’”
Michigan, which has an unemployment rate of 15.2%, has lost 406,000 jobs since the start of the recession in 2007. Besides Michigan, people in 26 states as well as in Washington, DC and Puerto Rico would also qualify for the extension. Over 300,000 jobless workers who reside in these high unemployment states are projected to run out of unemployment compensation by the end of September and a total of over one million workers in these states are projected to exhaust existing benefits before the end of the year.
Nationally, American job losses declined in August, to 216,000 – two-thirds less than the job loss in January and the lowest monthly job loss total in a year. However, job losses still total 6.9 million since the recession began in December 2007 and the national unemployment rate has increased to 9.7 percent – the highest level in 26 years. The underemployment rate reached 16.8 percent and more than one-third jobless workers have been out of work for more than six months.
The legislation would not add to the deficit because its cost is completely offset by extending for one year a federal unemployment surtax that has been in place for over 30 years, and requiring better reporting on newly hired employees to reduce unemployment insurance overpayments.
The House is expected to take up legislation to address the renewal of existing benefits for 2010 later this year. The federal Emergency Unemployment Compensation program and federal help for state extended benefits are due to expire at the end of the year.
“Expanding emergency unemployment compensation for thirteen more weeks is the first step, but we will need to extend the entire program by the end of the year,” concluded Rep. Levin.
Extending unemployment benefits is one of the most cost-effective and fast-acting ways to stimulate the economy because the money is spent quickly. Every $1 spent on unemployment benefits generates $1.63 in new economic demand according to Mark Zandi, chief economist of Moody’s Economy.com.
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