Some good news for job seekers who are nearing the end of their unemployment benefits: CQ is reporting that Congress will next week take up Rep. Jim McDermott's bill providing another extension of unemployment benefits. The bill would not affect all unemployed workers (and this is generally the case with extensions), it would add an additional 13 weeks of benefits for states with unemployment rates averaging 8.5 percent or higher over three months.
The news comes at a time when Labor Department data shows job cuts are narrowing, but the unemployment rate is ticking higher as employers have not yet picked up their hiring. Indeed, longterm unemployment continues to climb. Nearly 5 million Americans were out of work for six months or more in August. States with the highest unemployment rates already provide as much as 79 total weeks of unemployment benefits with previous federally funded benefit extensions.
There appears to be plenty of political support for extending benefits again, particularly given the still-fragile state of the economy. The National Employment Law Project estimates about 1.5 million Americans will exhaust their benefits by the end of this year. As I reported in July, unemployment benefits can be an effective stimulus, because they put money into the hands of people who will spend it immediately. "The benefit of extending unemployment insurance goes beyond simply providing financial aid for the jobless, to more broadly shoring up household confidence," reports economist Mark Zandi. "Nothing is more psychologically debilitating, even to those still employed, than watching unemployed friends and relatives lose benefits."
While some economists argue that unemployment benefit extensions increase the amount of time workers remain unemployed (because some studies suggest job searches are not as intense when the job seeker is receiving benefits), that argument is difficult to make in this economy. The Labor Department reports that the number of job openings in July fell by 121,000 to 2.4 million, the lowest since the series began to be recorded in 2000. That means there were 2.4 million openings for 14.5 million unemployed job seekers in July.