The New Direction Congress is committed to providing much-needed relief to the millions unemployed workers to assist them with rapidly rising gas and food costs, while they continue to struggle to find work in this economic downturn. Earlier this year, we enacted a bipartisan compromise to provide extended unemployment benefits. But those benefits will start to run out in October unless Congress acts. With today’s news of another 159,000 American jobs lost in September – the worst job loss in five years -- this action is critical to providing relief as well as strengthening the American economy and creating jobs.
Relief to America’s Workers, Effective Stimulus for the Economy
- Provides an additional 7 weeks of extended unemployment benefits for workers who have exhausted regular unemployment compensation (20 total weeks when combined with the 13 weeks provided earlier this year).
- Nearly 800,000 workers are projected to exhaust their current extended unemployment benefits in October unless Congress acts.
- Earlier this year, Congress helped 3.5 million Americans looking for jobs -- providing up to 13 weeks of extended unemployment benefits in every state to workers exhausting the 26 weeks of regular unemployment benefits.
- Under the measure, workers in high unemployment states are eligible for an additional 13 weeks of benefits (33 total weeks).
- Extending these benefits is one of the most cost-effective and fast-acting ways to stimulate the economy because the money is spent quickly, according to the Congressional Budget Office. Every $1 spent on unemployment benefits generates $1.64 in new economic demand. [Mark Zandi, chief economist of Moody’s Economy.com, 1/22/08]
- The $6 billion in benefits will be paid from the Federal unemployment trust fund, which has more than enough reserves to cover the cost.
Need for Immediate Action is Real
- America has suffered a ninth straight month of job losses totaling 760,000 this year. Job losses totaled 159,000 in September – the worst job loss in five years.
- The number of Americans looking for work climbed to 9.5 million in September – the highest number since December 1992. Over the past 12 months, the number of unemployed persons has increased by 2.2 million and the unemployment rate has risen by 1.4 percentage points.
- The unemployment rate continued at 6.1 percent -- the highest level in five years (September 2003).
- One in five (2 million) of those looking for work have been jobless for more than six months.
- Average wages have risen 3.4% in the past year, while prices have gone up nearly 6%.
- The American people are working harder, but making less -- even in the face of rising costs of health care, energy, and education. Since 2000, worker productivity is up, but the purchasing power of the typical working age family’s income is down by more than $2,000. As a result, 5.7 million more Americans are living in poverty and 7.2 million more Americans are without health care than in 2000.
- Food prices have risen at annual rate of 7.5 percent so far this year.
- Retail gas prices are at $3.58 a gallon – more than double that of 2001 – after peaking at $4.11 in July. And heating costs are expected to reach record levels again this winter – with heating oil costs rising 30 percent and families pending an average of $2,500 this winter.
