The United States Department of Labor (DOL) has decided to take matters in their hand, and they are intending to raise unemployment benefits for states with higher unemployment. The Labor Department’s Employment and Training Administration (NPRM) announced by releasing a report with little fanfare on Friday, Oct. 24, 2014 that they are planning to raise the unemployment benefits payments from Federal-State Extended Benefits (EB) Program for states that have high unemployment rates, and they intend to relax and make it easier to trigger the EB program in the states.
All the talk has been about extending the federal Emergency Unemployment Compensation (EUC) program, which extends benefits for Americans unemployed for more than 27 weeks and no longer covered by their state. The Federal-State Extended Unemployment Compensation Act of 1970 (EUCA), and its 1992 amendment provide for states with high unemployment rates a benefits extension, it they meet a trigger, unemployment rates of over 5 percent for a 13-week period, or 6.5 percent for the preceding three month period. Additionally in 1992 a calculation of a “high unemployment period” was added, and applies when a state has an unemployment rate of 8 percent or higher.
The DOL released an 89-page report with their proposal entitled “Federal-State Unemployment Compensation Program; Implementing the Total Unemployment Rate as an Extended Benefits Indicator and Amending for Technical Corrections; Notice of Proposed Rulemaking.” The DOL’s report states that they plan to “implement statutory amendments to the Extended Benefits (EB) program, which pays extra weeks of unemployment compensation during periods of high unemployment in a State.” They are also propos[ing] a methodology for computing the Total Unemployment Rate (TUR) indicator which is an optional indicator used to measure unemployment in a state,” to be based on the Bureau of Labor Statistics unemployment numbers.
Primarily, the department wants to raise the extended benefits rates from the 50 percent of regular unemployment rates they are now up to 80 percent of regular benefits. The 30 percent increase will be an immense help those long-term jobless that have the Extended Benefits program in their state. It might not help all long-term jobless especially those that have already lost benefits, but it is better than no action at all. The DOL will make their final decisions within a month.
In August, there was speculation that President Barack Obama would sign an executive order to extend the federal EUC program. When he did not and no longer mentioned the long-term unemployed in his speeches on the economy, instead hailing the dropping short-term unemployment rate and recovering economy, Americans thought he had forgotten them and would not do anything. Instead, Obama chose to take action this way, with as little press and attention as possible, not to make the unemployment benefits extensions a midterm campaign issue when the Democrats are losing their battle to retain control of the Senate and any little issue can sway the results.
The unemployment rate has been falling in the past months, but that has been mostly the short-term unemployment rate, while the long-term rate has remained stagnant for the past two months. In September, the unemployment rates fell in 31 states. Earlier this month the Bureau of Labor Statistics announced record low number of new jobless claims, the lowest numbers since April 2000. On Thursday, Oct. 16, 2014, they released the new weekly unemployment claim numbers showing applications fell 25,000 to reach on 266,000 for “the week that ended on Oct.11.” That number help give the DOL their lowest weekly average of new claims to 283,500 the lowest also since 2000.
It did not last long, because the numbers increased again for the week ending on Oct. 18. According the BLS’s weekly report released on Thursday, Oct. 23, the number of new claims rose to 17,000 to reach 283,000. Still the four-week average is 281,000, “the lowest level in 14 years.” Those record-breaking numbers however, are what killed the unemployment benefits extension along with opposition from a majority of Republicans in Congress, including Speaker of the House John Boehner, R-OH who expressed that receiving unemployment benefits rather than working is “a very sick idea for our country.”
The September jobs report released by the Bureau of Labor Statistics on Friday morning, Oct. 3 determined that 248,000 were created in the month, enough to lower the unemployment rate from 6.1 percent down to 5.9 percent, which the White House noted is “the lowest rate since July 2008.” The report indicated that the number of Americans unemployed fell by “329,000 to 9.3 million.” Last year this time the unemployment rate was at 7.2 percent, with 11.2 million Americans unemployed.
There may be progress being made in job creation and lowering short-term unemployment, but the situation is still unchanged for the long-term unemployed. According the Bureau of Labor Statistics (BLS) the situation remains unmoved from August to September. There are still three million Americans that have been “unemployed for longer than 27 weeks,” the threshold be considered long-term unemployed. They now represent 31.9 percent of all unemployed Americans up from the 31.2 percent share they represented in August’s report. The fact that they account for over a third of all unemployed is significant, and it is problematic that they are a growing segment of America’s unemployed.
The fact that the short-term unemployment numbers have improved has been deceptive, and election messages that the economy has recovered or least on the road to recovery overlooks the difficulties that the three million long-term jobless still face without the benefits extension. The long-term jobless have a more difficult time gaining employment facing prejudice from prospective employers. Treasury Secretary Jack Lew spoke to Bloomberg News in a September interview about the continuing problem; “That’s something we really have to push back on. Once somebody has been out of the workforce for five years, that’s a long time. It’s not good for the economy, and it’s a tragedy for them.” The average time now for the unemployed to get another job is 13.3 weeks, less than half of the Great Recession’s all-time high in June 2010 of 25 weeks, still it a long-time compared to times of economic prosperity.
The EUC program expired on Dec. 28, 2013, the Emergency Unemployment Compensation Extension Act of 2014 meant to extend the program, which Senators Jack Reed, D-RI and Dean Heller, R-NV co-authored and co-sponsored passed in the senate in April. Speaker of the House John Boehner, R-OH, however, failed to put the bill to a vote prior to its June 1, 2014 deadline, because it did not include job creation measures.
Reed and Heller unveiled a new bill on Tuesday, June 24, 2014, extending benefits for five months without a deadline and the retroactive element included in the first bill, but there are still no job creation measures included. The House also introduced its own bipartisan unemployment extension bill co-authored and sponsored by Representatives Frank LoBiondo, R-NJ-02 and Dan Kildee, D-MI-05 and introduced on Wednesday afternoon, June 25, 2014. There has been no action in the House or Senate since these bills were introduced mostly because of the extensive Congressional recesses, the midterm elections and the primacy of foreign policy issues.
The GOP have always blamed the long-term jobless for their predicament saying they are “lazy.” The Republicans also opposed the extension because they believed that continuing benefits only increased and perpetuated unemployment because the unemployed kept receiving government money and did not see the need to work. Speaker of the House John Boehner, R-OH apparently still retains those opinions and they are the real reason he did not put the Senate passed benefits extension to a House vote. The lowering unemployment rates seem to corroborate the GOP’s assertions however, although other factors may have turned the tide, not just the ending the EUC program, since the long-term unemployment rate has only marginally fallen in recent months.
Although many still hope, the Congress will put the unemployment benefits extension to a vote in the lame-duck period after the midterm elections, the lowering unemployment rates might still deter them. If the Democrats however, retain control of the Senate it might be a greater possibility, especially with the GOP humbled from a loss that so many predicted would be a victory. That situation coupled with the moves the DOL is making to raise the payment rates for the Extended Benefits program might signal that the unemployment benefits extension is not dead yet and there still a glimmer of hope to help the three million affected Americans.
- Federal-State Unemployment Compensation Program; Implementing the Total Unemployment Rate as an Extended Benefits Indicator and Amending for Technical Corrections; Notice of Proposed Rulemaking, Department of Labor, Oct. 24,2014
- ETA News Release: Unemployment Insurance Weekly Claims Report [10/23/2014]
- ETA News Release: Unemployment Insurance Weekly Claims Report [10/16/2014]
- S. 2532: A bill to provide for the extension of certain unemployment benefits, June 25, 2015, Referred to Committee — Full Text — Video of Press Conference
- H.R. 4415: Emergency Unemployment Compensation Extension Act of 2014, April 07, 2014
H.R. 4550: Emergency Unemployment Compensation Extension Act of 2014, May 1, 2014, Referred to Committee
- S. 2148: Emergency Unemployment Compensation Extension Act of 2014, March 13, 2014, Reported by Committee
S. 2149: Emergency Unemployment Compensation Extension Act of 2014, March 24, 2014, Reported by Committee
- H.R. 3979: Emergency Unemployment Compensation Extension Act of 2014, Jan 31, 2014, Passed Senate with Changes
Bonnie K. Goodman is the Editor of the Academic Buzz Network, a series of political, academic & education blogs which includes History Musings: History, News & Politics. She has a BA in History & Art History & a Masters in Library and Information Studies, both from McGill University, and has done graduate work in Jewish history at Concordia University as part of the MA in Judaic Studies program. She covers US, Canadian & Israeli politics, with a particular focus on the Obama presidency, Congress, domestic policy, and elections.