Californians lose extended unemployment benefits as recession lingers
"In the three years since Fed-Ed was passed, more than 912,00 people in California have relied on the benefits," Levy says. "That has brought $5 billion of federal funds into the ailing state economy. It has had a tremendous impact on the economy and when you add in a multiplying effect from money spent out there from these benefits on local businesses, it can be almost a $10 billion effect on the economy."
As the economic crisis drags on, federal stimulus and relief programs that were planned with a short downturn in mind dry up, a political climate of austerity in government spending has taken its place. Individuals caught in the fallout of the economic crisis increasingly find themselves with nowhere to turn.
Only one out of three unemployed workers statewide currently receive any unemployment benefits, and before the end of Fed-Ed, a staggering 700,000 people who had been receiving benefits during the economic crisis exhausted the previous maximum 99 weeks without finding work.
"What happens when we require people to go out and get jobs when there are no jobs? That's a nightmare. People are being cut off with no place to turn," Princeton professor of economics Paul Krugman said at the Commonwealth Club of San Francisco last month. "Benefits that are emergency benefits should not depend on some arbitrary timeline for the individual but for the duration of the emergency. If we have a flood, you don't say 'We are only going to help flood victims for three days.' We help them until the flood recedes."
Of those Californians who still do receive an unemployment check, over half have been out of work for more than six months, the period at which normal state funding ends and federally emergency extension programs take over. The remaining federal unemployment extension program enacted during the economic crisis — the Emergency Unemployment Compensation program — is set to phase out on Dec. 23 of this year. That is bad news for Californians locked out of the labor market who have exhausted the normal six months of state funded benefits.
Responding to the release of May's week jobs report, House Minority Leader Nancy Pelosi (D-SF) said the report, "Makes clear that we have more work to do to restore security and opportunity for the middle class. The time is now for Republicans to join us in moving forward on behalf of the middle class."
Without the renewal by Congress of federal unemployment extension deep in the presidential election cycle, another larger surge in people booted from the unemployment roles will be locked in competition for the state's paltry offering of new job creation — a punishing musical chairs game with real life stakes.
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