Goodbye Emergency UI

Starting this month, hundreds of thousands of jobless Californians will have an even tougher time paying the bills while they continue to search for work. That’s because emergency measures that provided additional weeks of federally supported Unemployment Insurance (UI) benefits to unemployed workers who exhausted their regular state benefits have expired. As we explained in a recent analysis, more than 400,000 jobless Californians will lose their benefits in December alone if Congress fails to restore emergency UI.

The expiration of federally supported UI is not just bad news for the unemployed, it’s bad news for businesses and the larger economy. Small businesses continue to report that poor sales are their single most important problem. Now, without emergency UI, jobless workers and their families will be forced to cut back on their spending, which means local businesses will have even fewer customers and weaker sales. As a result, businesses will have even less incentive to create jobs at a time when job growth is already abysmal. In fact, California lost an average of 10,000 jobs per month between May and October, after having gained an average of 20,000 jobs per month during the first five months of the year. And economic forecasters have become increasingly pessimistic about the state’s outlook. The Legislative Analyst’s Office projects that California will add just 100,000 jobs next year – gaining back just 7 percent of the jobs the state lost during the recession.

With grim projections like this one, it’s not surprising that dozens of leading economists recently called continuing emergency UI “sensible economic policy that will not only assist the unemployed but help maintain spending, overall demand, and employment at this critical point in the recovery.”

— Alissa Anderson