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March 20, 2011

We Need Unemployment Benefits Extended Beyond 99 Weeks

Congress has passed a legislation that extends unemployment benefits by 99 weeks to give unemployed people some respite from stagnant hiring in most industries. However, some advocacy groups claim that even such a long period of extended benefits may not be enough time for half the number of unemployed to get jobs. They are pushing policy makers for an extension of unemployment benefits by several more months.

THIS IS THE EXCUSE THEY ARE GIVING FOR NOT EXTENDING BEYOND 99 WEEKS!
In spite of the plea for extensions, several economists are quick to point out the potential pitfalls of increasing the duration of benefits further. They say that people would be encouraged to choose not to work to make use of government subsidies. These extensions are likely to cost the taxpayers a hefty $156 billion. Any additional funding will hit the government, which is already reeling from a budget deficit of $1.4 trillion after rolling out billions of dollars in bailout money last year.

As companies are keen on keeping costs at a minimum since the recession, they have put a freeze on recruitment, though there are signs that some of them are beginning to hire now. Congress has offered state-sponsored unemployment support for 26 weeks with the choice of reapplying for it to get up to 73 weeks of additional funding.

Advocacy groups argue that the benefits help people make mortgage payments and meet necessary living expenses. They also put money back in circulation in a slowly recovering financial market. Supporters of extended unemployment benefits also say that these benefits have helped revive the economy, as the jobless tend to spend every dollar they receive.

The other side of the raging debate points out that the unemployed will not get back to work any time soon, as they have unemployment benefit checks to tide them through the rough phase. If additional funding is withheld, they will have to take any job that they can get, which will be better for the economy in the long run.

The Labor Department statistics on the job availability versus job seeker ratio is quite disturbing. For every job, there are 5.5 applicants. But critics of unemployment benefits believe that work is available if people are willing to relocate or take jobs in different fields. They say that even if the Congress decides to extend benefits one more time, the unemployed should see it as the last extension.
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