Unemployment Benefits Extended Along With Payroll Tax Break
The payroll tax break compromise now up for a vote on Friday also extends unemployment benefits, but they may not be what the hardest hit need.
The 5 million people who would have lost unemployment benefits next year would likely benefit from job training more than anything, Welch Consulting's chief economist Stephen Bronars, said.
"Job openings are way up and layoffs are down but people out of work are having a hard time finding it," Stephen Bronars, chief economist with Welch Consulting said. "The people who have the least skills in vocation don't really match up with the jobs advertised. Those people are having a really hard time."
Bronars said extending their benefits might not be the best way to get those people re-trained and into advertised jobs.
With just nine days before a payroll tax break for 160 million Americans was set to expire, President Obama had been pressuring House Republicans to pass a two-month extension bill of the payroll tax cut, which is added pocket money for the employed. Americans, on average, would have lost about $40 per paycheck if the tax cuts had expired.
The Labor Department said 1 million unemployment claimants would have been affected in January alone. Now, Congress is expected to vote in favor of emergency unemployment compensation, a federal temporary extension of unemployment compensation for unemployed individuals who have already collected all regular state benefits.
In 2009 and 2010, Congress passed bills extending unemployment insurance for those out of work longer than six months, helping 17 million people, the Labor Department said. Last year, a bi-partisan compromise prevented 7 million Americans from losing these benefits in 2011.
There are approximately 13.9 million people in the country who are currently out of work, many of whom receive a combination of federal and state unemployment benefits. State unemployment insurance, often funded with federal support, would have been affected if the emergency funding expires.
California's Employment Development Department (EDD) reported Wednesday that 100,000 people would have stopped receiving biweekly benefits through the "Fed-Ed" program, which provides up to 99 weeks of support of up to $450 a week for the long-term unemployed in the state, the LA Times reported.
Unemployment figures, meanwhile, show significant decreases in those who say they are not working.
The number of people applying for unemployment benefits dropped last week to its lowest level since April 2008, the Labor Department reported on Thursday. First-time applications for unemployment benefits fell 4,000 to a seasonally adjusted 364,000, the third straight weekly drop.
The unemployment rate fell in November to 8.6 percent as the economy added 120,000 new non-farm jobs, the U.S. Labor Department reported earlier this month.