Federal Budget Deal Fails to Extend Unemployment Benefits for Over 82,000 Marylanders

Over 82,000 Maryland residents will lose their unemployment benefits in 2014 if federal lawmakers do not act to extend them. Last week, federal lawmakers agreed to a two-year budget agreement prior to adjourning for the holiday break, but failed to reach agreement on extending unemployment benefits for those still looking for work amid a sluggish economic recovery.

Maryland, like most other states, provides 26 weeks of temporary unemployment insurance to those that have lost their jobs. At the beginning  of the Great Recession began in 2008, Congress provided unemployed workers with additional benefits through the federal Emergency Unemployment Compensation program. But absent reauthorization, this program will expire at the end of the year. If Congress fails to act, almost 23,000 Maryland residents will lose benefits just after Christmas and another 28,500 will be cut off in the first six months of 2014. Further, absent reauthorization, those that lose their job in the first half of 2014 will see their unemployment benefits expire before the end of the year. In total, 82,600 Maryland residents will lose their unemployment benefits.

While emergency unemployment benefits are intended to phase down as the economy recovers, many are still having trouble finding jobs in a labor market that has yet to fully recover from the great recession. Indeed, there are still 1.5 million fewer jobs available in the national economy than there were prior to the start of the Great Recession six years ago, and almost 3 unemployed citizens for every job opening.

This is a problem, particularly since over 37 percent of those out of work are part of the ‘long-term unemployed,’ or those who have been out of work for six months or longer. According to the Economic Policy Institute, there are three times more long-term unemployed now than there were before the recession. Those who have been out of work for long stretches of time have a particularly hard time finding work, as studies show that employers are less likely to consider them for jobs.

These factors, combined with the unprecedented nature of the current long-term unemployment problem, should compel Congress to act on their behalf. As the Center on Budget and Policy Priorities points out, the long-term unemployment rate is at least twice as high now as when federal lawmakers have allowed emergency unemployment benefit to expire following previous.

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Besides the toll on the unemployed and their families, the failure to extend unemployment benefits has economic impacts as well. If benefits expire, job-seekers will have considerably less money to spend, which will reduce demand in the economy. The result would be a nationwide loss of 240,000 jobs in 2014, according to the Department of Labor. Further, rather than serving as a disincentive to look for work, the National Employment Law Project shows that unemployment insurance, by helping job seekers and their families pay for basic necessities, enables them to actively engage in the job hunt.

While securing a budget deal is an important step, lawmakers must do more to ensure full economic recovery and support citizens still trying to weather the Great Recession.

Check back for more coverage on the budget and its effect on federal workers in Maryland.