The jobless situation seems to be reaching a crisis point. The Department of Labor’s Bureau of Labor Statistics noted that not only was the unemployment rate at 9.8 percent (15.1 million individuals) for November, but that 6.3 million of those jobless were long-term unemployed (27 weeks or longer). And since statistics indicate that it takes at least 34 weeks for the average jobseeker to return to work, that would be eight weeks without an income if not for the unemployment benefits extensions currently used by Congress — that expired on November 30. Still, even if Congress reauthorizes the unemployment benefits extensions and emergency extensions (the Tier I-IV categorizations), 4 million more 99ers could join the already over 2 million 99ers who have seen the exhaustion of their regular, extended, and emergency extended benefits and still remain unemployed.
As Shahien Nasiripour reported in the Huffington Post, the President’s Council of Economic Advisers concluded in a study that the rising number of 99ers could have a negative impact on the overall economy in the coming year. A staggering number, some 4 million individuals, will lose their unemployment benefits extensions in the coming year — and many of those will not return to work.
According to the study, 40 percent of the long-term unemployed are the sole income earners in their households. Income in those homes would fall at least 90 percent.
Part of the reason the cut-off of benefits to so many would be so devastating to the economy is that the poor and those living on the economic margins tend to put their income directly back into the economy by paying bills and buying foodstuffs and necessities. This would have a ripple effect on not only those that would be impacted by the loss of that income directly but indirectly (grocery stores, gas stations, utility companies, landlords).
But getting those millions back to work could be difficult. Current estimates indicate that there is one job for every five applicants. To make things worse for the unemployed, a report issued in October by the Office of Publications and Special Studies at the Bureau of Labor Statistics found that many were remaining jobless due to employers tending to hire the unemployed that have been jobless for shorter periods of time. The report also found that there was a general trend of low employee turnover in many industries, thus lengthening the time many individuals remained out of work.
But adding 4 million 99ers to the already estimated 2 million provides a dismal outlook for the jobless and the future jobless. Seeming to add support to the foreboding Economic Advisors study, the Federal Reserve issued economic projections through 2012 and found that the unemployment rate probably would not drop below 9 percent throughout 2011 or 8 percent in 2012.
Even though such dire forecasts indicate a pressing need to fund the jobless until they find gainful employment, at present Congress has allowed the unemployment extensions to lapse and are reportedly brokering some sort of deal that would reauthorize unemployment benefits extensions for at least one more year. But that legislation will do nothing for the current 99ers and those set to become 99ers in the near future.
There may not be anything coming their way, either. At present, the only bill designed to deal with the 99er unemployment issue is one introduced by Senator Debbie Stabenow of Michigan that would create a Tier 5 extension for the long-term unemployed. However, that bill has languished and it is unknown if it will see the Senate floor and a vote anytime soon.
It was estimated that if the short-term unemployment extension proposed by Congressman Joe McDermott (D-WA) was not passed, the number of 99ers would increase to 6 million by the end of February. Although a deal for a one-year unemployment extension package seems imminent, that unfortunate number of 6 million might be reached anyway.
“Employment Situation Summary,” BLS.gov
Shahien Nasiripour, “4 Million Americans Set To Lose Unemployment Benefits Even If Congress Passes Extensions,” HuffingtonPost.com
“Ranks of those unemplyed for a year or more up sharply,” BLS.gov