Reed Urges Renewal of Unemployment Insurance Benefits
SENATE FLOOR STATEMENT
Mr. REED. Madam President, I come to the floor today to once again press for action on my bipartisan legislation to restore emergency unemployment benefits. Over 3.5 million Americans have lost benefits since the program expired last December. The need to help these individuals, their families, and the economy remains compelling to all of us.
In April, Senator Heller and I were able to draft a bipartisan bill, and with the help of many of our colleagues, the Senate acted to restore these benefits. Unfortunately, the House Republican leadership has refused to take up the Senate-passed bill or consider their own proposal. While the President has occasionally talked a good game about the need to extend this aid to job seekers, it has never been made a ``must have'' by the administration. Indeed, it is hard to understand why an extension of these benefits was not included in the President's supplemental appropriations request.
So as we consider this supplemental appropriations bill this week, which includes critically important emergency funding measures, it is somewhat disheartening that extending unemployment insurance, another emergency need, has once again been ignored.
In the past 6 months, the national unemployment rate has dropped from 6.7 to 6.1 percent. The long-term unemployment rate has dropped just below 2 percent. It is great to see these positive strides in our economy. But I strongly disagree with those who would argue that these signs of improvement suggest that emergency benefits are no longer needed. Let me underscore a few reasons why emergency unemployment benefits are still necessary.
First, while the long-term unemployment rate has dropped from 2.3 percent in January to just under 2 percent in June, the current level is still significantly higher than at any other point when emergency benefits were allowed to expire. In June 2008, under President George W. Bush, when the long-term unemployment rate was just 1 percent, a supermajority of Members in both Chambers voted to create emergency unemployment insurance benefits for the long-term unemployed. That was at 1 percent.
Now we are about twice that. Today our long-term unemployment rate of about 2 percent means over 3 million Americans are out of work through no fault of their own, and have been searching for work for more than 6 months. These individuals are struggling. With each passing month, their financial situation becomes increasingly dire. They should not be held to a different standard than those who were searching for work in 2008.
Second, the long-term unemployed are still struggling mightily to find work. According to a recent report by economists at the Federal Reserve, when you look at the likelihood that someone will find a job in a given month, the rate for the long-term unemployed is roughly the same as it was at the height of the great recession several years ago. In fact, someone who is long-term unemployed is almost twice as likely to stop looking for work altogether and fall out of the labor force as they are to get a job.
These difficulties in finding work are persistent across educational levels and age groups, although they are much more pronounced among the African-American and Latino communities. So we are seeing people who are trying very hard to find work but they are facing the same obstacles they were facing at the height of the great recession.
Again, I think this underscores the need to help these people. Some have argued that the improvement in the labor market is driven by Congress's failure to extend emergency benefits. According to this argument, taking away unemployment insurance benefits pushes people to step up their job search. I find this argument very difficult to accept when you face people back in my home State of Rhode Island who have been looking desperately, in a situation where there are usually three, four, five, six applicants, in some cases, for every job. They are looking and looking and looking. In Rhode Island, our unemployment rate is tied for the highest in the Nation. It is not the position we want to be in.
To suggest that these people are not desperately searching for work really sort of, I think, demeans them unnecessarily. We all know, because we go home. There are people who have been looking. They are skilled. They are talented. They have worked for 20 years. They want to work. Getting the $300 a week, perhaps, in benefits is nothing like the salary they commanded. It will not, in the long term, pay for their mortgage, pay for their children's education, pay for the necessities of life. They know that. They are in a desperate situation. This assistance helps a little bit.
Not only the contact we have with our constituents but recent research also demonstrates that this argument is flawed, that ``just cut off the benefits and everybody goes right back to work.''
We can use North Carolina to test the impact of cutting benefits, because that State took steps in July 2013 to terminate unemployment benefits for anyone who has been out of work for 20 weeks or more. If opponents of extending unemployment insurance are correct, North Carolina's policy change should have led to significantly sharp declines in its unemployment rate.
A recent article in the New York Times by Justin Wolfers, an economist with the University of Michigan and the Brookings Institution, explores evidence from North Carolina to assess this claim. According to his research, when North Carolina is compared with other Southern States that did not cut their programs, North Carolina's economic growth ``looks quite similar to its peers, and certainly not better.'' The levels of job growth in North Carolina are similar to neighboring States such as South Carolina that did not change their programs. Dr. Wolfers concludes that, ``There's simply no evidence ..... that cutting benefits cuts unemployment.''
Others have argued that cutting UI at the State level will save money and help the economy of the States. In response, eight States decreased the number of weeks an individual could receive State-level unemployment insurance benefits. However, a recent report from the Economic Policy Institute suggests these States did not save significant amounts of money or boost employment. This is further evidence that cutting UI benefits is simply not a good idea.
The refusal by House Republicans to renew unemployment insurance benefits does not just hurt individuals and families for each week they do not get this modest support. The effects are more far reaching, with research suggesting that the long-term unemployed will be hurt for decades to come.
According to research by a senior economist at the Federal Reserve Bank of Boston, ``workers unemployed for more than 26 weeks experience a much larger negative income effect and have lower earnings even after 10 or 15 years than those workers that experienced shorter-duration unemployment spells.''
Many are forced to rack up debt on their credit cards just to meet basic level needs.
A recent Gallup poll also shows that nearly 20 percent of individuals who were unemployed for 12 months have been treated for depression. This is a serious blow not just to your economic well-being but to your identity, to your sense of worth, to your sense of being able to help your family and provide for your family. These effects are long term and very serious
This rate of depression is twice as high as for those who have been unemployed for just a few weeks. So there is, apparently, a correlation.
The impact is far-reaching for individuals, their families, and the economy as a whole. It undercuts, again, the notion that there is no cost or that there is some benefit to cutting these benefits. There is a long-term cost.
One of the aspects too, is in order to qualify for these benefits, you have to be actively searching for work. Without these benefits, the incentive to look for work is, in some respects, diminished. Indeed, other phenomena take place: the lack of resources, the increasing desperation and depression.
Again, it is encouraging to see that there are signs of economic improvement. It is encouraging to see that some of the long-term unemployed have found jobs. We dipped below that 2-percent level.
But that does not mean we should turn our backs on those who are still looking. That does not mean we should treat them differently than we did people in 2008 in the same position in a difficult economy looking for work. Those of us who continue to fight for the long-term employed--I must also say that Senator Heller in this effort has been a stalwart. We have heard lots of excuses and a lot of discussion, in my view, of flawed arguments about how we should abandon the program, and, more pointedly, abandon these people.
I don't think we should.
What is certain in terms of analysis is the nonpartisan Congressional Budget Office estimates that our failing to renew this program last December will cost over the course of this year 200,000 jobs. And this emergency aid helps families make ends meet until they find work.
One of the great ironies here is that in refusing to extend these benefits, we basically shut down 200,000 jobs in this country. It is almost absurd. It is a catch-22: We are shutting the doors on the unemployed so we can get them to work, but yet the analysts will tell us that if we had extended benefits, we would have gained 200,000 jobs.
Why? Because these payments go right back into the economy. Someone who is unemployed is going to take that modest check, about $300, $350, and pay the phone bill so they can call about work, they are going to get the car repaired so they can get to the job interview, and they are going to do the things they have to do to help their children get through the day. They are not going to save it or buy French impressionist paintings. They are going to go right into the local economy and spend the money.
For many reasons this is why I think we have to do it. That is why Senator Heller and I have filed an amendment to this emergency appropriations bill, on a bipartisan basis. The amendment will be the same as we have proposed previously, except for offsets, because for the second time offsets we have identified to pay for an extension of benefits have been used for another measure. I guess we must take some satisfaction that we have developed offsets for restoring emergency unemployment insurance and then another program grabs them and it gets passed here. But I would rather have the extension of benefits too.
So we are moving forward. I hope we can. I am committed to fighting for these American workers so they won't be left behind now and in the years to come.
Madam President, I encourage my colleagues to join us.