Rep. Lofgren and Bay Area Members Call on Congress to Extend Benefits

Media Contact: Christine Glunz, 202.225.3072

Washington, DC – U.S. Representative Zoe Lofgren (D-San Jose) and 10 other Bay Area lawmakers released a Congressional report today estimating that between January and June of this year, 17,100 unemployed workers in the San Jose metro area and 53,500 in the Bay Area could lose their regular unemployment insurance benefits if Congress does not take action. 

“The results of this study reinforce the dire unemployment situation in the Bay Area and confirm the need for Congress to extend benefits,” Representative Lofgren said.  “It's disgraceful that over 17,000 people in San Jose and over 300,000 Californians will lose their unemployment benefits in the next few months.”

Democrats in the House and Senate have been pushing for an extension of the federal unemployment benefits program ever since the last benefits extension expired in December 2003.  In a growing sign of anxiety about the economy among lawmakers, their efforts have gained bipartisan support – a majority of the House, including 39 Republicans, voted for an amendment introduced by Rep. George Miller (Martinez) in February to extend the program, and a majority of the Senate, including 12 Republicans, voted for a different bill to extend benefits in March.  Alan Greenspan recently endorsed an expansion of the program, but Republican leaders in the House and Senate are still blocking a straightforward expansion of the program.

“The Republican leadership has refused this extension despite repeated requests from Democrats. Those out of a job need help while they look for work,” said Lofgren.  “Not only would extending unemployment benefits help those who are looking for work, it would also promote economic growth by pumping $1.73 into the economy for every $1 spent on benefits.”

The urgent need for extended benefits became even clearer earlier this month, when the latest national jobs figures revealed an unexpectedly weak labor market.  In February, the private sector did not add a single net new job nationwide. Even though the overall unemployment rate has dropped slightly since its peak of 6.3 percent in June 2003, economists widely agree that the reduction was caused primarily by people having given up looking for work out of frustration.  California is in the process of requesting a loan from the U.S. Department of Labor to help pay its regular unemployment benefits.

The report estimates the number of people who will exhaust their benefits in four metro areas in the first six months of this year: Oakland metro area – 19,700 workers; San Francisco metro area – 12,200 workers; San Jose metro area – 17,100 workers; and Vallejo-Fairfield-Napa metro area – 4,500 workers.  Earlier this year it was reported that more people nationwide exhausted their unemployment benefits this past January than in any other January since this data was first collected 30 years ago.

These numbers do not reflect the total unemployed population, just the number of people collecting regular unemployment benefits who are expected to run out of those benefits before they can find a job.  The total number of people officially counted as unemployed in the Bay Area is 182,300, according to the most recent data. In California, according to the report, 1,072,000 people are unemployed.  An estimated 314,344 Californians will have exhausted their benefits by June of this year.  That means that 12,090 unemployed workers in California are projected to exhaust their benefits each week, according to the Center on Budget and Policy Priorities.

A new report by the Congressional Budget Office, analyzed by the Center on Budget and Policy Priorities, makes a compelling case for extending unemployment benefits:  UI helps prevent the middle class from falling into poverty.  Half of UI recipients had monthly incomes below the poverty line, if their UI benefits are not considered.  Their UI benefits reduce that poverty rate dramatically.  Few of these unemployed workers were poor before they lost their jobs.

The report, based on the most recent government data, was prepared by the Democratic staff of the House Government Reform Committee at the request of 11 Bay Area lawmakers: Reps. George Miller (Martinez); Democratic Leader Nancy Pelosi (San Francisco); Pete Stark (Fremont); Tom Lantos (San Mateo, San Francisco); Anna Eshoo (Palo Alto); Lynn Woolsey (Petaluma); Zoe Lofgren (San Jose); Ellen Tauscher (Pleasanton); Barbara Lee (Oakland); Mike Thompson (Napa); and Mike Honda (San Jose).