An (even rougher) Economy

Amid another lag in the economic recovery, times have become still harder for many Americans these past few weeks. Bloomberg reports that from April 7 through May 12, approximately 370,000 Americans across 23 states stopped receiving unemployment insurance checks. That’s because a little-discussed provision called the “three-year lookback” was left unchanged when the extension of unemployment benefits and the payroll tax cut was signed into law in February,. The provision was best summarized by the Center on Budget and Policy Priorities:

A state may offer additional weeks of [unemployment insurance] benefits through [the federal Extended Benefits program]if its unemployment rate reaches certain thresholds (13 weeks if at least 6.5 percent; 20 weeks if at least 8 percent), and if this rate is at least 10 percent higher than it was in any of the three prior years.

The purpose of the Extended Benefits (EB) program is to provide extra help to individuals who have been out of work for so long that they have exceeded the maximum number of weeks for which they can receive unemployment insurance in their state. As noted above, the EB program kicks in when the economy is struggling, as evidenced by a high unemployment rate, and it ends when the unemployment rate becomes in line with the rate of the previous three years. In normal times, this is not especially unreasonable because a consistent unemployment rate over a period of three years would seem to suggest that the unemployment rate has returned to its pre-economic downturn level. But the economy is far from “normal” today.

As such, the Center on Budget and Policy Priorities continued:

 …unemployment rates have remained so elevated for so long that most states no longer meet this latter criterion (referred to as the “three-year lookback”). In short, benefits have ended not because economic conditions have improved, but because they have not significantly deteriorated in the past three years.

Just under one-third of all unemployed Americans (totaling 3.9 million workers) have been out of work for more than a year. In most cases, these are people for whom there may simply be no job yet available, even though they have spent months looking for a job — and uprooting families, surrendering a spouse’s job to move elsewhere or other extreme measures may not be feasible. The recovery has not yet come to all corners of American life, and unemployment benefits must match this reality. In 2010, unemployment benefits kept 3.2 million people above the poverty line and helped families keep going while looking for work. We must all remember what we are taught in Deuteronomy, that “if there is a needy person among you…do not harden your heard and shut your hand against your kin. Rather you must open your hand and lend whatever is sufficient” (Deuteronomy 15:7-11). To be sure, a system that in an hour of need is expunging thousands from the rolls is by no means lending sufficient aid. Unemployment insurance is a critical program that can provide real, immediate relief for millions of Americans who are down on their luck—we should not turn our backs on them just as the going gets even tougher.