Jobless benefits begin to expire

Something is coming along the horizon that could put a further drag on the economy. U.S. unemployment insurance benefits are beginning to run out on those who were laid off early in the recession. Many people receiving jobless benefits have been looking for jobs, but have been unable to find any. State and federal governments are considering extending jobless benefits due to the poor economy.

From the http://www.ajc.com writer Michael E. Kanell gives us more on jobless benefits drying up.

Advocates have called for Congress to pass another extension, an idea that has some bipartisan support. Several bills to extend the benefits were introduced just before Congress took its August recess.

More than 6 million Americans are receiving unemployment benefits, although there are about 15 million officially jobless. In Georgia, only about 60 percent of the half-million jobless receive benefits. Others were not eligible because they quit or were fired, because they have stopped looking for work or were self-employed. Some already exhausted their benefits.

Unemployment checks are calculated from the worker’s former earnings, with a cap of $330 a week. A $25-a-week boost was added by this year’s federal stimulus package.

As more of the unemployed reach the end of their checks, “I think we will see more foreclosures, more descent into poverty,” said Heidi Shierholz, senior economist for the Economic Policy Institute.

The end of benefits also removes a stream of spending that aids the economy, she said.

“The money goes to people who are the most cash-strapped. These people have no choice but to go out and spend that money.”

The federal extension injects nearly $1 billion a week into the economy, according to a report by the National Employment Law Project.

In Georgia, 13,844 people will lose their federally-funded benefits during September, according to the NELP report. By the end of the year, 58,887 Georgians and 1.33 million Americans will have reached that destination.