With Benefits Cut Off, Long-term Unemployed Brace for a Grim New Year
There was little merry or bright this holiday season for millions of unemployed Americans who are losing their extended unemployment benefits.
Many depend on these meager payments, a federal extension of state unemployment programs that expired as of the last Saturday of 2013, to stay afloat. After tapping out their savings, downsizing their living space, and draining their retirement funds, one-time managers and MBA grads bought Christmas gifts secondhand and worry over what the new year will bring. [...]
The families receiving extended unemployment benefits are generally in dire financial straits, so helping them helps the economy overall, economists say. “Emergency UI has one of the largest economic bangs for the buck,” Mark Zandi, chief economist at Moody’s Analytics, said via email. According to Zandi’s calculation, these payments have a multiplier of 1.49: For every dollar in extended unemployment benefits jobless Americans get, $1.49 goes back into the economy.
"Nobody wins when we leave people looking for work out in the cold," said Amy Traub, a senior policy analyst at advocacy group Demos. "It hurts the economy when local businesses can’t rely on basic spending… It strains the private safety net when food banks and charities have to serve more people,” she said. “It slows down our recovery."
