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Oregon Jobs Data Show Why Recovery Act Extensions Are Needed

Statement by OCPP Policy Analyst Joy Margheim

Today’s state unemployment data confirm why it’s so important for Congress to move quickly to extend Recovery Act provisions that bolster the economy and cash-strapped states.

Oregon’s unemployment rate has stayed essentially flat for the past 7 months, averaging 10.6 percent over that period, according to the Oregon Employment Department. Oregon finally saw some job growth in April, but not in May. Meanwhile, both the labor force and population have been growing modestly, offsetting the job gains. The weak labor market is unlikely to improve anytime soon, as experts predict tepid job growth the rest of this year.

Continued labor market weakness shows that it’s essential for Congress to continue the unemployment insurance provisions in the Recovery Act. By extending benefits through late 2010, Congress can not only offer some certainty to families suffering through long-term unemployment but also continue injecting significant funds into Oregon’s economy.

Earlier this year, the Oregon Center for Public Policy found that extended unemployment benefits and a $25 additional weekly benefit amount together pumped about $767 million into the state from February 2009 to January 2010. Those federal dollars have helped stabilize Oregon’s economy. Withdrawing that stimulus while Oregon’s labor market remains weak would undermine our recovery.

In the same vein, it’s vital that Congress continue providing cash-strapped states extra Medicaid funding, which flows through to the private sector health care industry. Like most states, Oregon faces a significant revenue shortfall, and without federal assistance, deep service cuts loom in the public and private sectors that rely on government funding.

Laying off teachers, public safety officers and public and private health providers certainly won’t help Oregon or the nation’s unemployment woes. It’s also no recipe for a sustained economic recovery. Congress can prevent cuts in human services programs by extending enhanced Medicaid funding.