Navigation

As Unemployment Benefits Expire, Job Creation Hangs In The Balance

 

Congress returned for a lame duck session this week to a report on the positive impact that government action had on job creation during the depths of economic crisis, and a new political landscape that threatens even more stalemate just when the need for additional Congressional action on jobs is clearer than ever.

Last week, the Congressional Budget Office (CBO) released its fourth quarterly report on the impact of the American Recovery and Reinvestment Act (ARRA), demonstrating that the government's efforts to revive the economy boosted growth and employed millions of Americans. Specifically, between July and September 2010, ARRA created or saved up to 3.6 million jobs, lowered the unemployment rate by between 0.8 and 2 percentage points, and raised gross domestic product (GDP) between 1.4 and 4.1 percent. The Center on Budget and Policy Priorities notes in a recent analysis, "among ARRA's most effective provisions for saving and creating jobs [are] transfer payments to individuals (such as increased food stamp benefits and additional weeks of unemployment benefits)."

Just as last week's CBO report underscored the importance of government intervention in the economy, Congress allowed extended unemployment benefits to expire this past Tuesday, threatening the livelihood of families across the country.  Not only are these benefits critical for the long-term unemployed, but they are one of the most effective methods of stimulating market activity and boosting job growth.  Mark Zandi, chief economist at Moody's Economy.com, has found that extending unemployment benefits has a significant bang for the buck in fueling economic recovery by maintaining consumer spending in hard-hit communities. In fact, every $1 in federal spending on extending unemployment insurance generates $1.61 in market activity, powering the very consumer demand that leads private businesses to create jobs.

With unemployment persisting around 10 percent and the ratio of unemployed workers to job openings at 5 to 1, the situation for working families remains dire, and further action is desperately needed. In the final days of this Congress, it is critical that lawmakers move boldly on extending benefits for Americans who, by no fault of their own, cannot find work in this bleak economy.

And as new leadership prepares to take control of the House of Representatives in January, families who are still suffering through the effects of the worst economic downturn since the Great Depression will get the chance to see whether conservatives are serious about creating jobs, or whether they will continue spouting empty rhetoric while obstructing the very policies that spur economic growth.

This article is part of PSN's email newsletter, The Stateside Dispatch.
View other items from this edition