Crucial Lifeline for Out-of-Work New Jerseyans Disappearing This Weekend

Contact: Jon Whiten, or 609-393-1145 ext. 15

Saturday’s expiration of federal emergency unemployment benefits is bad news for New Jersey’s jobseekers and its fragile economic recovery. The expiration will harm New Jersey more than any other state since the Garden State has the highest share of its labor force on extended benefits. Approximately 260,100 jobless New Jerseyans stand to lose benefits over the next 12 months without Congressional action to restore the Emergency Unemployment Compensation (EUC) program.

emergency unemploymentAllowing EUC benefits to expire would harm these jobless New Jerseyans:

• The estimated 90,300 jobless workers now receiving EUC who will receive no benefits starting next week.

• The estimated 89,100 New Jerseyans receiving regular state unemployment insurance (UI) payments, which typically run for a maximum of six months, who will exhaust them in the first half of 2014 before they can find a job. If EUC expires, these workers will receive no further benefits.

• The estimated 80,700 people who will lose their jobs in the first half of 2014 and exhaust their regular state UI in the second half of the year before they can find a job. If EUC expires, these workers will receive no further benefits.

Extending EUC benefits – which along with the Extended Benefits program have helped over 1 million New Jerseyans during the Great Recession – would also save an estimated 19,660 jobs in New Jersey and 240,000 jobs nationwide.

The failure to renew the emergency benefits will disproportionately impact New Jersey due to the state’s slow recovery. Unemployed New Jerseyans make up 5.3 percent of the number of Americans who could lose benefits within the next 12 months – close to double New Jersey’s share (2.8 percent) of the total U.S. population. On the other hand, renewing the benefits would have a disproportionate positive impact on the Garden State, with the jobs saved here making up 8.2 percent of all jobs saved nationwide.

“The failure of Congress to extend these benefits is terrible news for New Jersey and for the hundreds of thousands of struggling residents of our state who are looking for work,” says New Jersey Policy Perspective president Gordon MacInnes. “These benefits are crucial to keeping households afloat and preventing middle-class families from sliding into poverty.”

EUC, like the federal emergency unemployment insurance (UI) programs enacted in every major recession since 1958, is a temporary program that 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 EUC 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.

“It doesn’t take a policy expert to see that New Jerseyans are still struggling,” MacInnes says. “Cutting off this lifeline when folks need it most is harsh on job-seekers and damaging to the state’s economy.”

More resources on EUC:
Center on Budget and Policy Priorities
Economic Policy Institute
National Employment Law Center
House Ways and Means Committee
The Council of Economic Advisers and the Department of Labor

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