Merry Christmas: Millions to lose jobless benefits

1.3 million people likely to be left with no unemployment benefits just three days after Christmas.

That’s because a budget deal proposal in Congress fails to extend the Emergency Unemployment Compensation Program, which provides federal funds for those who have run out of state unemployment benefits.

The program ends Dec. 28, and it will take a separate move by Congress to extend it.

“It’s frustrating Congress didn’t include the extension,” said Claire McKenna, a policy analyst at the National Employment Law Project.

“The White House is in favor of it and so are some in Congress, so we’re hoping for a separate measure to get passed,” she said. “But it’s hard to predict what will happen.”

Besides those in December, 850,000 people will run out of state unemployment benefits in the first quarter of 2014. If they are still out of work, they will have no access to federal benefits. About 1 million more without work will lose state benefits by June.

According to the Bureau of Labor Statistics, 4.1 million people are counted as long-term unemployed (those who have been out of a job for six months or more). They make up 36.1 percent of the total unemployed, which is at a national overall rate of 7 percent, the lowest in five years.

That number of long-term unemployed is higher than in any month of the Great Recession, which economists say ended in 2009. And it’s more than three times the percentage of long-term unemployed in 2007, which was 17.5 percent.

Some of the improvement in the employment picture results from people dropping out of or not entering the workforce because of weak job opportunities, according to the Economic Policy Institute (EPI), a think tank that studies the issues of low- and middle-income workers.

The better numbers have actually hurt the long-term jobless: Because the jobless rate is part of the formula used to calculate unemployment benefits, states cut those benefits and their duration when the rate is lower.

The Emergency Unemployment Compensation Program (EUC) began in June 2008, when the national unemployment rate was 5.6 percent.

The EUC extends federal benefits to people still out of work when their state benefits—averaging about $300 a week for 26 weeks—are exhausted.

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