Tuesday, April 13, 2010

The Effects of Unemployment Benefits

Starting last week, workers who have been struggling to find jobs face the added burden of watching their benefits run out. Due to an impasse, Senators failed to extend Emergency Unemployment Compensation, which expired on April 5, though they are in negotiations for a possible extension until May 5.

Within the next two weeks, more than 212,000 jobless Americans that rely on unemployment insurance will lose their $300 - $400 weekly checks, likely causing many to run out of the funds needed to cover basic resources such as food, rent, utilities, car payments, and education costs.

Figures show that 6.5 million individuals, (44.1 percent of total US unemployment) have been without employment for more than six months and therefore, qualify for federal benefits. According to economists, money paid in benefits to jobless Americans provides one of the most effective means of economic stimulus. This is because individuals strapped for income will spend the money they receive at local businesses, improving local economies and spurring job growth. Without this money, individuals spend less in their local economies, causing these economies to stall and shrink.

-Anna Walker

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