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National Employment Law Project

For Immediate Release: July 5, 2012 Contact: Tim Bradley, tim@berlinrosen.com, 314-440-9936

Newly Unemployed Americans to Lose Federal Jobless Aid


Without Congressional Action, Stark Cut-Off Could Expose Millions to Greater Economic Instability
New York, NYAmericans who lose their jobs this week and hereafter will only have access to jobless aid provided by their states26 weeks in most casesand will not be eligible for any federal unemployment support if they run out of state benefits before finding new work, analysis released today by the National Employment Law Project shows. With all federal unemployment insurance programs scheduled to expire by years end, more than 900,000 Americans will exhaust their state benefits during the first three months of 2013 and will be left without any jobless aid afterwards. In addition, more than two million Americans already receiving federal extended unemployment insurance will face immediate cut-off from the program in the week between Christmas and New Years. With the termination of all federal unemployment extension programs looming, unemployed Americans are hurtling towards a huge financial cliff with no net at the bottom, said Christine Owens, executive director of the National Employment Law Project. If Congress lets the programs expire at the end of the year, the average unemployed American, who currently needs nine months to find a job, will face an average of three months of joblessness without any unemployment support. In states that have begun cutting their programs, such as Florida, Georgia, Michigan, Missouri and South Carolina, unemployed workers will confront the destabilizing effects of losing unemployment insurance even sooner. The federal unemployment programs have been a critical lifeline for millions of workers and families hit hard by the Great Recession, Owens said. The job market remains weakits taking people more than nine months on average to find a new job, and were just not creating enough jobs quickly enough. There are still more than three jobless workers for every one job opening. Pulling the plug on federal unemployment insurance too soon would put millions of American families in economic jeopardy. Long-term unemployment remains at near-record levels, fueling concerns that the federal programs are being terminated prematurely. The average unemployed worker is jobless for around 40 weeksfar longer than the 26 weeks of jobless aid offered by most states. Roughly half of all unemployed workers (47.9 percent) who receive state unemployment insurance run out of it without having found employment. Were still in the midst of an intractable long-term unemployment crisis, and yet, fewer and fewer unemployed Americans are getting the help they needand the situation only looks to get worse, said Owens.

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Of the 12.7 million Americans who are currently unemployed, less than one in two is currently receiving any form of unemployment insurance. If Congress fails to reauthorize federal jobless aid, less than one in three unemployed workers will enter 2013 with any form of unemployment insurance. (By comparison, around two in three unemployed workers in 2010 were receiving some form of unemployment insurance under either a state or federal program.) The two federal unemployment extension programsEmergency Unemployment Compensation and Extended Benefitswere targeted for phase-out in legislation enacted by Congress in February. The Extended Benefits program, which provided a final 13 to 20 weeks of benefits to unemployed workers in 35 high-unemployment states, will have drawn to a close by the end of August, with more than 500,000 workers having been cut off benefits since the beginning of the year. In September, the weeks of benefits available under the Emergency Unemployment Compensation program will be scaled down, and unless Congress reauthorizes the program, no unemployed worker will be eligible for any federal unemployment benefits after December 29, 2012. Federal unemployment benefits have played a critical role in slowing the erosion of the middle class. Without these benefits, millions more would have fallen into poverty over the last three years, said Owens. Theyve also given a major boost to the economy, injecting badly needed consumer demand and spending at local businesses. Congress needs to do whats right for Americas workers and the economy, and reauthorize the federal Emergency Unemployment Compensation program. The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more information, please visit www.nelp.org. ###