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Welfare & Subsidiarity

U.S./Unemployment Benefits Extended; Where are the Jobs?

Last week, the U.S. Senate voted to extend unemployment benefits for 2 million people out of work for over six months. But will the jobs come back?

The U.S. Senate voted to extend unemployment benefits for 2 million people.The U.S. Senate voted to extend unemployment benefits for 2 million people.

Last week, the U.S. Senate voted on an emergency measure to extend unemployment benefits for those who have reached the 26 week limit to 99 weeks. The unemployment rate is currently 9.5 percent with 15 million out of the job market. Forty-six percent of these have been out of work for more than six months, the largest number since the 1940s. Republicans, with the exception of the two senators from Maine, Olympia Snowe and Susan Collins, have opposed the measure over the past six weeks. But this time, as Senator Carte Goodwin was sworn in to take the place of deceased Senator Robert Byrd, the 60th vote was cast to pass the bill.

The bill will cost $34 billion. Republicans argued that unemployment benefits should be extended, but not without cutting spending elsewhere so as not to increase the deficit. The ballooning deficit is now at 9.9% of GDP. Republican House Whip Eric Cantor explained: "What Republicans are about: Unemployment benefits, yes. Deficits, no. Surely out of a $3 trillion budget here in this town we can find a way to pay for these unemployment benefits. Republicans are about trying to figure out how to pay for things around here."

Last Monday, flanked by three unemployed people, President Obama pushed for passage of the bill, which was voted down three times in recent weeks: “After years of championing policies that turned a record surplus into a massive deficit, the same people who didn’t have any problem spending hundreds of billions of dollars on tax breaks for the wealthiest Americans are now saying we shouldn’t offer relief to middle-class Americans like Jim or Leslie or Denise, who really do need help."

The U.S. Bishops Committee on Domestic Justice and Human Development urged support for the bill, stating: "In the last 48 days, nearly 2 million families have lost the financial support afforded them by unemployment insurance as a minority in Congress have refused to extend benefits.” They noted that 44% of the unemployed have been out of work for more than six months, and there are currently five applicants for every job opening.

Even with the extension of benefits, long-term employment prospects are not encouraging. Experts agree that many of the jobs that have been lost are not coming back. A report from the Congressional Budget Office stated bluntly: "“Recessions often accelerate the demise or shrinkage of less efficient and less profitable firms, especially those in declining industries and sectors.” Currently permanent versus temporary job losses are at their highest level since 1967. Technology and automation have reduced labor needs, and that contraction becomes more pronounced during a recession. Those who have lost jobs in dying industries now need to develop new skills. Of the unemployed, 1.4 million have already reached their 99 week limit, a number which has increased sixfold over three years.