Congress’ Failure to Renew Unemployment Insurance is Costing New Jersey Hundreds of Millions of Dollars
We’ve already detailed how Congress’ failure to renew emergency federal unemployment insurance at the end of last year could harm a quarter-million out-of-work New Jerseyans and tens of thousands of their children. Now we see just how much the inaction is costing New Jersey’s economy – and it’s staggering.
New Jersey, which has the nation’s highest share of long-term unemployed, is projected to lose $243.4 million in just the first two months of this year as many struggling residents are cut off from the crucial benefits that have kept them afloat in a job market that continues to be very difficult, according to new estimates released by Democrats on the House Ways & Means Committee.
The temporary unemployment insurance program, like the federal emergency unemployment insurance (UI) programs enacted in every major recession since 1958, provides additional weeks of UI to qualifying jobless workers during periods when jobs are hard to find. Emergency federal UI not only helps relieve hardship among those jobseekers and their families; it is also widely recognized as one of the most cost-effective ways to increase demand and spur job creation in a weak economy. Both of those tasks — relieving hardship and boosting the economy — remain absolutely vital today, particularly in New Jersey, where the pace of economic and job market recovery has been slower than the nation as a whole.
Opponents of extending these benefits claim that the program is too big and has lasted too long. While the program has indeed lasted a lot longer, helped a lot more unemployed workers and paid out substantially more in benefits than the programs enacted in past recessions, that’s because the Great Recession’s impact on the economy and labor market has been far worse than past recessions. In fact, without the consumer spending that UI generated, the recession would have been even deeper and the recovery even slower.
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