7,500 unemployed Oklahomans at risk of losing benefits unless Congress acts

Despite encouraging signs that an economic recovery is gaining strength, unemployment remains at stubbornly and unacceptably high levels. Nationally, the jobless rate in October stayed stuck at 9.6 percent, while the latest state unemployment numbers found that 121,800 Oklahomans, or 6.9 percent of the workforce, are out of work. While some workers have relatively short stints of unemployment between jobs, the magnitude of the job losses this recession and the slow pace of recent job creation have left a large segment of the unemployed population unable to find work for extended periods. According to the National Employment Law Project, the unemployed are experiencing record periods of joblessness: nearly 42 percent of the 15 million jobless workers are “long-term unemployed”—that is, out of work for six months or longer. With there being 4.6 unemployed workers for every available job, most of the unemployed continue to be without work through no fault of their own.

For many of these jobless workers and their families, weekly Unemployment Insurance (UI) benefits provide an essential safety net allowing them to recoup a portion of their lost income – about $290 per week on average – and  pay the bills without additional public support or a full-blown financial emergency. As in past national recessions, Congress has responded to high levels of unemployment by approving federally-funded extensions of UI benefits that go beyond the basic 26 weeks of state-funded benefits. Under the main temporary program of federal jobless benefits, called Emergency Unemployment Compensation (EUC),  qualified unemployed workers who are actively seeking work receive an additional 34 to 53 weeks of UI benefits, depending on the state’s unemployment rate. NELP reports that so far, in 2010 alone, nearly 9.5 million workers collected federally funded benefits, contributing an estimated $68 billion to the nation’s economy.

However, unless the returning Congress takes action soon, temporary federal UI benefits are set to expire on November 30th. The expiration of benefits would affect unemployed workers in two ways: those currently receiving federal benefits would be cut off as soon as they reach the end of their current benefit tier, and those reaching the end of their 26 weeks of basic state benefits would become ineligible for an extension. NELP calculates that in Oklahoma, 7,590 long-term unemployed workers will be affected in December by the termination of federal benefits: 4,060 who will lose EUC benefits they are currently receiving and an additional 3,533 who are expected to reach the end of their state benefits at the 26-week cut-off.

The National Employment Law Project points out that allowing cutting off extended UI benefits with unemployment at such high levels would be unprecedented:

Never in the history of the program have unemployment benefits been eliminated, or even reduced, when unemployment rates were so high. The only other time in the past 60 years that the unemployment rate has remained so high for so long was during the early 1980s. At that time, Congress did not cut federal unemployment benefits until the national unemployment rate had fallen to 7.2 percent—a far cry from our current rate of 9.6 percent.

The impact of losing benefits would be felt over the coming holidays not only by workers and their families but by the retail sales industry, grocery stores, utility companies, lenders, and others in the private sector whose customers would be even more severely pinched. The overall loss to the economy would be approximately $6.8 billion each month.  And as more people lose federal benefits, the impact would be felt both by community-based safety net providers and by our financially-squeezed state government, as more of the unemployed turn to TANF cash assistance, Medicaid, and other state-supported services.

The outgoing Congress has only a few days left  in session in which to approve an extension of UI benefits before the program expires. Preventing increased hardship for thousands of Oklahoma families who are struggling with long-term joblessness should be the very top priority for Oklahoma’s Congressional delegation in the days ahead.