Sticking it to the unemployed

Opinion: November 22, 2010 at 12:00a.m.

Los Angeles Times: Washington is poised to stop providing extended unemployment benefits despite the huge number of laid-off workers, the paucity of job openings, the high rate of underemployment in every sector of the economy and stubbornly slow economic growth. That’s because Republicans in the Senate insist that, unlike the hefty tax cuts they covet for the wealthy, the comparatively slender subsidies for the unemployed must not be financed with borrowed money. This penuriousness is not just hypocritical, it’s bad economics.

The current federal program, which offers up to 73 extra weeks of unemployment benefits to idled workers, is due to expire Nov. 30. If it does, about 2 million unemployed people will have their benefits cut off in December. Their prospects for finding work remain unusually dim; according to the Bureau of Labor Statistics, there are still five job hunters for every opening.

Unemployment insurance not only helps keep individuals afloat after they’re laid off, it counteracts an economic downturn. As economists at the Congressional Budget Office and elsewhere have noted, providing unemployment benefits is a particularly effective economic stimulus because idled workers are likely to spend their benefits rather than save them. According to one study, that spending could support nearly half a million jobs.

The downturn in the economy has been so severe that even the extended benefits haven’t bought enough time for many Americans to find work. Four million people are expected to have exhausted their extended benefits by April; with so many cash-starved consumers, spending could fall again next year and dampen the recovery.