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What’s Happening with Unemployment Benefits?

Yesterday, congress approved a six month extension of emergency unemployment benefits for the long-term unemployed.  But it wasn’t easy. 

Why was there so much debate over the extension?

This extension will reinstate aid to nearly 3 million people that lost their benefits on June 2 and it couldn’t have come at a better time.  Two weeks ago unemployment claims were at the lowest point since August 2008, but just last week, unemployment claims increased by 37,000. 

The extension wasn’t approved sooner because there were concerns regarding the national debt.  Those representatives who opposed the extension wanted the unemployment benefits paid for upfront with the stimulus package and not have anyone pay for it later.

Back in the day, extending unemployment benefits was a no brainer, but now, there is much apprehension including the thought that collecting unemployment is an attractive alternative to working (while
historical research supports this view, we have to take into account that today’s economic climate is VERY different from that of the past).

With five unemployed workers for every job opening, it’s not as though those who are unemployed are not searching for work.  It’s just that corporations are hesitant to hire, despite four straight quarters of economic growth. 

So is the real issue here the fact that companies aren’t hiring at an accelerated rate? And will the extension of unemployment benefits slow them down even more?  To be honest, we don’t know—“Results may vary.”  Regardless, 3 million unemployed people are happy today. Some say they’ll use the money to pay bills while others say that the extended benefits have simply restored hope.