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Unemployment Benefits End for Long-Time Unemployed: What’s at Stake for Wisconsin in the Fiscal Cliff

The 'fiscal cliff' will hurt many in Wisconsin and the USA by ending their unemployment benefits.

At the end of the year federal unemployment benefits come to an abrupt end, ending all unemployment benefits beyond the 26 weeks of benefits provided by the state. This change, which is part of the fiscal cliff, will make it harder for jobless workers in Wisconsin to make ends meet and could slow the Wisconsin economy.

Right now, jobless workers in Wisconsin have access to 37 weeks of federal unemployment benefits. About 44,000 Wisconsin workers who haven’t been able to find a job currently receive federal unemployment benefits, pumping $42 million a month into the Wisconsin economy. Those out-of-work workers will see their benefits suddenly terminated.

Nationally, more than two million jobless workers could lose their federal unemployment benefits at the end of the month.   In addition, nearly one million people who would otherwise become eligible during the first three months of 2013 may not be able to receive any EUC benefits if this lifeline for the long-term unemployed is not extended.  The failure to extend it would remove close to $30 billion of income from the pockets of jobless workers next year, which would be a huge hit for local communities and the national economy.

This is a bad time to end federal unemployment benefits. Wisconsin’s unemployment rate has been slow to drop – in October 2012, Wisconsin’s unemployment rate was 6.9%, the same that it was nine months earlier in January 2012. To get back to pre-recession levels of employment, Wisconsin needs to add nearly 250,000 new jobs, according to the Center on Wisconsin Strategy. Wisconsin isn’t making meaningful progress towards that goal – in fact by some measures, Wisconsin’s job growth has been among the slowest in the country.

There simply aren’t enough jobs in Wisconsin for everyone who is seeking work. Congress should wait until the economy is on a sounder footing to let federal unemployment benefit expire.

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Photo by DonkeyHotey released under a Creative Commons license.

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