Two-Year Itch: Unemployment Benefits Hit 99 Weeks

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Nov 12 2009, 2:42 pm by Derek Thompson

Two-Year Itch: Unemployment Benefits Hit 99 Weeks

Even though I fully supported -- and still support! -- the latest extension of jobless benefits, this is still a terrifying statistic. The new bill extends unemployment benefits by 20 weeks for those living in states with unemployment rates greater than 8.4%, which means "the maximum a person in one of those states could receive is now up to 99 weeks, or nearly two years -- the most in history." Just as strikingly, more than a third of the nation's unemployed have been out of work for more than six months.

This statistic is tragic, and it has short and long term implications for our economic policy and our national identity.

Regarding our economic policy, the unprecedented duration of unemployment highlights the well-reported fact that the Great Recession has been marked by average firing rates and much lower than average hiring rates, creating a job market that's literally as competitive as Harvard University's undergraduate application process. The takeaway for fiscal policy should be that it's too early to start thinking about paying down the deficit with TARP funds and over-eager spending cuts. Vast and lasting unemployment is eating into private sector demand and the most sensible recourse is public outlays to fill the gap. The takeaway for monetary policy is that inflation is really, truly not a risk.

More deeply, I worry about the entrepreneurial energy of a country with thousands of Americans paid to be out of work for two years. I'm not arguing that the jobless ranks are swelling with nefarious welfare queens and bums gleefully living off the government. I'm just concerned about what two years languishing on unemployment does to the spirit. And if many of those 99-weekers are among the young who have been disproportionally slammed by the recession, it's all the more reason to worry about the long-term impact of the recession, an impact that doesn't appear in our GDP and BLS reports, but rather in the spirit of a generation that came of age just as the country was nursing a hangover.

Comments (3)

jmo3 November 12, 2009 3:23 PM

More deeply, I worry about the entrepreneurial energy of a country with thousands of Americans paid to be out of work for two years.

I'm not sure about that. Many people start working when they are 15 and keep working right on through till they are 67 and every day they dream of what it will be like when they can finally retire. Well, for those who are able to get by comfortably on severence and UI it can change your perspective.

Where once you might have dreamed about all the wonderful things you would be able to do, if only you had more time, you realize what being idle really means. You'd think you'd have all the time in world but you find out that some extra sleep, some extra TV, a few errands and yet another day has gone by. For many it can allow them to refocus on work as they realize that being home, with all that spare time, isn't the panacia they had thought it would be.

winspire November 12, 2009 4:01 PM

99 weeks is a long time, and it's not healthy for most to be out of constructive activity for that long. Also, it seems that most of the news about this topic is all negative and other than job finding tips, few offer positive solutions that might help at least some people.

I'll offer one, even though I may get criticized for it, because it certainly helped me. Let's face it- there's not enough jobs and something has to change. While there's nothing wrong with being an employee, thinking only that one way is a kind of limitation that keeps many from learning skills that would allow some to create a different path.

An example- Many have a computer, but it's usually used more for entertainment than anything else- even during hours when no job searching is being done. Something is off with that picture.

For the first time in history, we are 3 feet in front of the world, yet few learn how to use it in a way to render 1) value to others and 2) long term income for ourselves.

While there are many hyped-up websites out there promising the world and delivering little (I admit I spent too much money finding that out), there are also some exceptions, and if one looks long enough, there are some great and solid training resources out there that can give someone a track to run on.

This particular one is still largely unknown, but an increasing number of folks are getting income results from the teachings and resources there- (many of them free) It helped me build some good online income and though it's not for everybody, with over a billion people online and growing everyday, creating online revenue is an option more people should explore.

I got started for the price of a sandwich and while I'm not close to rich yet, it sure beats spending off-time watching TV, sliding into debt waiting for the phone to ring. Plus it feels good to pay off some of those bills with some new skills I can use anywhere. http://leavethejobbehind.com

papabear November 13, 2009 5:45 AM

My layoff came just as I was reaching the burnout stage at my job. The use of the term "productivity" has sort of a PTSD effect when I hear it. The last 2 years I survived cuts and restructuring as my staff dwindled and I was forced to take up the slack, all without a pay increase or even comp days.

The detoxing effect was incredible and it took me close to 6 months before I realized I had been used up. They had hired someone younger for less pay ( a woman) and changed my job title (to avoid legal action even though the tasks remained the same)

I had to change the idea of being unemployed to being self-employed and then to being entrepreneurial.

This down time provided me time to retrain and broaden my skill set. The "Great Recession" destroyed my employee spirit and gave birth to my own business sense.