Washington, D.C. – In a hearing of the U.S. Congress Joint Economic Committee (JEC) this morning, Bureau of Labor Statistics (BLS) Commissioner Dr. Keith Hall highlighted that November’s long-term unemployment rate was higher than at any other time that Congress cut off federal unemployment benefits.  Dr. Hall contrasted the 1.1 percent long-term unemployment rate in June 1985 with November’s 4.1 percent rate. The long-term unemployment rate was only slightly higher – 1.3 percent – when Congress terminated benefits following the 2001 recession. The long-term unemployment rate is the percentage of the workforce that has been unemployed for 27 weeks or longer.

Most states provide 26 weeks of unemployment insurance.  After the state coverage is exhausted, federal benefits kick in and provide coverage for up to a total of 99 weeks.  In November 2010, 41.9 percent of the unemployed had been out of work for 27 weeks or longer.

Rep. Carolyn Maloney, Chair of the Joint Economic Committee, said, “Federal unemployment insurance provides a lifeline to those who have been out of work for six months or more.  Congress has never cut off benefits with the long-term unemployment rate this high and the pain this great.  It is unprecedented.  I am astonished that Republicans in Congress aren’t helping us to resolve this issue.  Ending these benefits will remove $80 billion in purchasing power and result in the loss of more jobs.  We all have a stake in making sure these benefits are resumed as soon as possible.”

When the federal unemployment program was cut off in June 1985, the unemployment rate was 7.4 percent and the long-term unemployment rate was 1.1 percent, with 1.3 million long-term unemployed.  In November 2010, when the federal unemployment insurance program expired, the unemployment rate was 9.8 percent, the long-term unemployment rate was 4.1 percent, and there were 6.3 million long-term unemployed.

Much of the debate on unemployment in recent weeks has focused on the fact that Congress has never let the federal unemployment insurance program end when unemployment was higher than 7.4 percent.  Today’s hearing shined a light on the fact that there is also a huge gap between today’s long-term unemployment rate and the long-term unemployment rate when Congress ended unemployment benefits coming out of previous recessions.

(Direct link to the video: http://www.youtube.com/watch?v=fSCJMOhzUX8.)

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The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov