New Economic Analysis: $400 Million Drained from State Economies in Unemployment Benefits This Week Alone

WASHINGTON – The expiration of federal unemployment insurance at the end of last week is already taking more than $400 million out of the pockets of American job seekers nationwide and state economies, according to a new analysis by Ways and Means Committee Democrats. Unemployment insurance is viewed as a very effective fiscal stimulus because jobless Americans tend to spend their unemployment insurance right away. The analysis spells out how much federal funding each state is going without in the first week since the emergency Federal Unemployment Compensation program expired. In Illinois, nearly 82,000 people lost an average $313 weekly benefit for a total statewide economic impact of $25 million. In Ohio, more than 39,000 people lost an average weekly benefit of $312 for a total statewide economic impact of $12 million.

At 11 a.m. this morning, Ways and Means Ranking Member Sander Levin (D-MI) and Democratic Whip Steny H. Hoyer (D-MD) will join former Labor Secretary Robert Reich and Harvard economist Lawrence Katz in holding a press call to highlight the harmful economic impact that will result if Republicans in Congress don't agree to extend the program.

"In state after state, Americans who have lost their federal unemployment insurance in one fell swoop last week are struggling to get by," said Ways and Means Ranking Member Levin. "Every week that Republicans fail to act tens of thousands of additional long-term unemployed Americans lose this vital lifeline as they look to get back on their feet after the worst recession in generations, and the economy in each state is taking a hit."

Overall, failing to renew the EUC program will cost the economy 200,000 jobs this year, according to the Congressional Budget Office. Note that the below estimate is conservative because it only takes into account the total dollar amount provided per week by the now expired EUC program. Economists generally multiply these estimates by 1.5 to 2 to show the true economic impact.