The end of federally funded emergency unemployment benefits could affect 76,100 Oregonians, according to a report last week by the White House Council of Economic Advisers and U.S. Department of Labor.
Extending the program, which paid Oregonians $23 million in November alone, became a bargaining chip last week during negotiations in Washington, D.C., over the federal budget. Lawmakers are attempting to reach a budget deal before the scheduled adjournment Friday.
The Emergency Unemployment Compensation program paid benefits to nearly 2,000 people in Central Oregon in November alone: more than $1.2 million. That money goes away Dec. 28 unless Congress extends the program.
Opponents of extending the benefit say it perpetuates an entitlement that actually increases unemployment while also increasing the U.S. debt. Proponents say the jobless need a little more time to find work as the economy continues its climb out of the Great Recession.
“The economic experts will tell you that spending on unemployment compensation is one of the things you can do that has the most positive impacts on the economy,” said U.S. Rep. Earl Blumenauer, D-Portland. “It goes right back to the gas station or the grocery bill or clothes for the kids.”
The federal program pays benefits only after the unemployed exhaust their state unemployment benefits. Oregon pays 26 weeks of unemployment insurance, funded by a tax on employers. That benefit pays about half the workers’ usual paycheck.
U.S. Rep. Greg Walden, R-Hood River, a member of the Republican leadership, in a prepared statement said extending the benefit would actually lengthen the term of unemployment for some Americans and deepen the U.S. debt by $25 billion.
“I have strong concerns about yet another extension of this ‘temporary’ program, which has already operated for 51/2 years,” Walden said Thursday.
He cited an October study by the National Bureau of Economic Research, a private, nonprofit agency, that stated benefit extensions subsidize unemployment and discourage “labor supply,” and may offset the economic stimulus that proponents claim the benefit provides.
Opponents of an extension cite, as Walden does, the Congressional Budget Office, which Tuesday reported that extending the emergency benefit through 2014 would cost the U.S. another $25 billion. An extension, however, would also boost government revenue, by $500 million by 2023.
Half a paycheck
In the last week of November, the state paid $11.8 million in regular unemployment compensation to more than 39,000 Oregonians. The average check amounted to $297, according to weekly statistics from the state Employment Department.
That week, 811 people exhausted their state benefits and potentially became eligible for emergency unemployment benefits, paid wholly by the federal government. It provides 14 weeks of additional payments, initially, and up to 47 weeks in three stages, or tiers, depending upon the state’s unemployment rate.
In November, nearly 2,000 Central Oregonians — 964 in Deschutes County — received $2.3 million in emergency jobless benefits, according to state figures. By contrast, 1,819 Deschutes jobless — nearly the same number that received emergency benefits in three counties — received $2.2 million in state unemployment for the same month.
Congress enacted the Emergency Unemployment Compensation program in 2008. Since then, 378,035 individuals have received emergency payments in Oregon, according to Tom Fuller, state Employment Department communications manager. Recipients are required to show they’ve looked for work.
In 2013 alone, those payments amounted by the end of November to more than $345 million.
Janet Bauer, an analyst for the Oregon Center for Public Policy, said, “The extended benefit helps those who are really having a hard time stay in the job market and continue looking. It’s an incentive for struggling workers to hang in there.”
Sea of numbers
In Washington, D.C., last week, the debate over Emergency Unemployment Compensation stole moments here and there.
Following the Congressional Budget Office report, the White House Council of Economic Advisers and the U.S. Labor Department on Thursday issued a 29-page report, “The Economic Benefits of Extending Unemployment Insurance.” The report argues that failure to extend the benefit will reduce demand for goods and services and cost 240,000 jobs nationwide in 2014. President Barack Obama the same day called for extending the emergency benefit.
The Oregon Center for Public Policy weighed in Monday with a fact sheet, stating 49,900 Oregonians would lose emergency benefits: 20,900 immediately after Dec. 28 and another 29,000 in June 2014, when they exhaust state unemployment relief.
Opponents to an extension say that with the economy improving, now is the time to pull the plug on extended benefits. Proponents argue the recession has given ground grudgingly, and although employment continues to improve, the Central Oregon labor market continues to struggle.
“One of the things we’re not seeing in this jobless recovery is enough new opportunity to bring the jobless rate down,” said Jason Carr, executive director of the Partnership to End Poverty and former Prineville representative to Economic Development for Central Oregon.
“That’s why there’s so much debate on how long to extend the program. It’s likely that until we see job growth, 1 or 2 percent drops (in the unemployment rate) over a quarter, that, at least at some level, that unemployment extension should continue. That’s one way I would look at it.”
In Deschutes County the unemployment rate, which stayed at 10 percent or above for 58 months, dropped below 10 percent in August. It measured 9.4 percent in October. Jefferson County measured 10.4 percent and Crook County, 12.1 percent.
The state Office of Economic Analysis predicts the statewide unemployment rate, at 7.7 in October, will remain between 7 percent and 8 percent in 2014.
If Congress extends emergency unemployment compensation through the new year, 55,000 to 60,000 Oregonians would receive at least one week’s worth of benefits, according to an Oregon Employment Department analysis.
However, state analysts expect the number of unemployment claims to taper in the new year; fewer new claims means fewer individuals exhausting their state unemployment.
On the other hand, the Office of Economic Analysis forecasts an improving state economy with continued job growth.
“The economy gets rosier in 2014 with the prospect of 36,800 new jobs,” Nick Beleiciks, Oregon Employment Department economist, wrote in September, referring to the forecast.
Leisure and hospitality, professional services and construction, all important sectors in Central Oregon, are expected to improve in the coming year.
Between now and full economic recovery stands a gulf the long-term unemployed have yet to bridge. If Congress sidesteps an extension this week, a lean Christmas awaits those relying on the emergency compensation benefit.
“I think there will be efforts to try and help these people,” Blumenauer said. “Put aside the humanitarian benefits, but just the cold calculation for what’s best for the economy. The first choice is to get them to work, but helping them maintain their families helps the economy.”
— Reporter: 541-617-7815, email@example.com