fiscal cliff

  • November 16, 2012
    Guest Post

    By Christine L. Owens, Executive Director, National Employment Law Project

    With the election behind us, the looming fiscal cliff has now moved front and center in our national debate. The stakes are enormous, though as many note, the “cliff” is really a “slope,” with the effects of going over it more gradual than immediate and remediable by future action.  But for one group of Americans -- the long-term unemployed -- Congress’s failure to meet an end-of-year deadline means a catastrophic plunge. Here’s why.

    The Emergency Unemployment Compensation (EUC) program enacted in mid-2008 and since renewed ten times, provides between 14 and 47 weeks of federal unemployment benefits, depending on states’ unemployment rates, for jobless workers who reach the end of their state benefits (typically, 26 weeks) without finding work. Since Congress last reauthorized and shrank the EUC program in February 2012, the total number of weeks of federally-funded benefits for long-term unemployed workers has declined significantly, by an average of 31 percent across the states.  

    The EUC program is now set to expire at the end of the year -- a demise that is premature. Though the unemployment rate is falling, at 7.9 percent it is still 40 percent higher than when EUC was first implemented. More significant, long-term unemployment -- joblessness longer than six months -- has grown substantially in recent years: At five million individuals, long-term unemployment accounts for 40.6 of overall unemployment, a share more than double that in mid-2008 (18 percent) and one that has declined only marginally from the 42.6 percent rate last February, when the program was renewed. With more than three unemployed workers for every job opening, the average duration of unemployment is 40 weeks. These jarringly long spells and sustained high rates of long-term unemployment are record-setting, underscoring the continued need for the EUC program.