CBPP Statement: Statement by Chad Stone, Chief Economist, on the January Employment Report
Publication Date: February 2008
Author(s): Chad Stone
Special Collection: John D. and Catherine T. MacArthur Foundation
Keywords: Job displacement; Economic inequality; Economic projections; Unemployment rate
The percentage of the unemployed who have been looking for a job for more than half a year and are still out of work --the group that extended unemployment benefits target--is mounting. In January, 18.3 percent of the unemployed had been looking for a job for at least 27 weeks. (Unemployment benefits are cut off after 26 weeks in most states.) At the start of the last recession in March 2001, in contrast, the long-term unemployed made up only 11.1 percent of all unemployed workers. The percentage of the unemployed who have been out of work this long is unusually high for this point in the business cycle. So is the percentage of the total labor force consisting of long-term unemployed workers. A temporary extension of unemployment insurance benefits would help the people hardest hit by the weakening economy and would boost the economy with one of the fastest acting and most effective forms of stimulus available. Unlike tax rebates, which can’t begin to go out until mid-May, extended unemployment benefits could start reaching workers and boosting consumption within 30 days.