Over the next year, an estimated 1,013,384 California workers will lose the unemployment benefits that help them stay afloat while looking for jobs, unless Congress acts, according to a new report from the White House Council of Economic Advisers.
CEA Chairman Austan Goolsbee held a teleconference with reporters today and e-mailed copies of the report to demonstrate the impact of letting the benefits lapse. Nationwide, almost 7 million workers will be affected.
“Extending this support to those hardest hit by this crisis is not only the right thing to do, it’s the right economic policy,” Goolsbee said in a statement touting the report. “Letting millions more Americans fall into hardship will hurt our economy at this critical point in our recovery and immediately undermine consumer spending.”
Without extended benefits, California would have had 115,948 fewer jobs as of September 2010, and failure to act to extend benefits again could cost the state 89,399 jobs by the end of next year, the CEA report says.
Democrats tend to cite economists who say unemployment benefits are an effective means of economic stimulus, because recipients are more likely to spend the money immediately on their basic needs – food, clothes, housing and so on – and so put it back out into the economy rather than saving it.
Republicans tend to say there’s simply not enough money in federal coffers to extend the benefits, and that it would be better to extend tax cuts for the wealthy – including some small businesses – in order to stimulate job creation.