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CenterPoints

August 2009

Thousands of Unemployed Oregonians Need Congress to Act

by Joy Margheim

Unemployment benefits will run out for thousands of Oregon workers in the next few months. By moving quickly to extend those benefits, Congress can spare workers, their families and our economy greater hardship.

In normal times, Oregon workers who lose their jobs through no fault of their own can collect unemployment benefits for up to 26 weeks. The money to pay for those benefits comes from a trust fund managed by the state of Oregon, among the most solid trust funds of any state in the country.

But we’re not living in normal times. The deepest downturn since the Great Depression has caused massive job losses in Oregon and across the country. Since December 2007, when the recession began, Oregon has seen over 107,000 jobs vanish and its unemployment rate skyrocket.

Jobs are hard to come by these days, and that’s not expected to change anytime soon. Many economists predict that the end of the recession will be followed by a “jobless recovery.”

Trapped in a sinking job market, millions of workers across the country have found a lifeline in congressional extensions of unemployment benefits. The latest extension arrived in the federal recovery package enacted earlier this year, which also boosted the benefit amount by $25 per week and exempted the first $2,400 in unemployment benefits from taxation this year. Those actions by Congress have helped thousands of Oregon families cover basic needs as unemployed breadwinners seek work during these difficult times.

The Governor and the Oregon legislature also bought additional time for Oregon’s unemployed workers and their families. Able to rely on a well-funded unemployment insurance trust fund created by their predecessors, the Oregon legislature established 13 weeks of state-funded benefits for workers who have exhausted their regular or federal extended benefits. The state extension, which will cost the state’s unemployment insurance trust fund up to $30 million, runs from October through the end of the year. It will help about 6,000 unemployed Oregonians stay afloat.

But by January of next year, those among the 6,000 who have been unable to find jobs will be without a safety line. Their ranks are estimated to grow at the rate of about 2,500 to 3,000 each month as additional workers exhaust all their unemployment benefits. The number of those with no safety net will spike in May 2010 when the extension provided in the federal recovery package ends.

The damage would extend beyond the many personal tragedies of those losing their unemployment insurance benefits. When it comes to economic stimulus, unemployment benefits are recognized as providing some of the best bang-for-the-buck value. The unemployed tend to spend their benefits payments quickly and locally, helping their communities’ economies. If unemployed workers run out of their basic support, their neighborhoods will also feel the pain.

It’s not just Oregon that faces a looming danger. All states are confronting the problem of workers unable to find work during the limited time that unemployment insurance benefits are provided.

So when Congress returns to work after its August recess, one of its first orders of business should be to extend unemployment benefits through 2010. Bills already introduced would reauthorize the unemployment provisions of the federal recovery package for another full year. Ideally, Congress would also give longer extended benefits and continue to exempt some or all benefits from taxation.

The day will come when job growth resumes, and surely no one looks forward to that time more than workers who are now unemployed. But until such day, Congress needs to extend unemployment benefits to protect not just vulnerable workers and their families, but our state’s economy, as well.


Joy Margheim is a policy analyst with the Oregon Center for Public Policy.

 

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