Stimulus from jobless aid fades as hiring grows

Bloomberg News
By the time Congress got around to passing an extension of emergency jobless benefits earlier this month, Clyde Lance no longer needed them. More

To continue reading this article, please do one of the following.



GOVERNMENT

Stimulus from jobless aid fades as hiring grows

Bloomberg News
Posted 1/14/13

By the time Congress got around to passing an extension of emergency jobless benefits earlier this month, Clyde Lance no longer needed them.

On Dec. 17, his 52nd birthday, Lance started a full-time job helping train technicians for the International Society of Automation in Research Triangle Park, N.C., ending a three-year search for a permanent position.

“I didn’t even realize it was my birthday,” said Lance. “I believe God helped me, gave me this job.”

The dwindling ranks of the long-term unemployed, while testament to the improvement in the labor market, also shows the diminishing returns from what economists such as Mark Zandi say is one of the most effective government programs implemented to spur the recovery: extended unemployment-insurance payments. By the time all figures are in, Lance will be among the almost 1.5 million people who stopped getting those checks last year.

“The bang-for-the-buck from the program is among the highest of any fiscal-stimulus program,” said Zandi, chief economist of Moody’s Analytics in West Chester, Pa., who estimated that every dollar spent in benefits generated 1.55 times as much economic activity. “It is important to have it in place as long as unemployment is high and the recovery is fragile.”

The legislation recently passed by Congress preserved benefits for harder-hit states that provide payments to the jobless for as long as 73 weeks, extending the normal program that typically lasts for the first 26 weeks of unemployment. About $30 billion in long-term benefits will be paid this year, down from about $45.5 billion in 2012, according to government estimates.

Had the benefits lapsed, it would have decreased economic growth by almost 0.2 percentage point this year, according to estimates by economists at JPMorgan Chase & Co. in New York.

Of course, some of that shortfall will be made up by the bigger paychecks and the subsequent gains in spending of the newly hired workers who no longer get jobless payments.

Next Page
Calendar
PBN Hosted
Events

Join PBN and two panels of successful female executives, business owners and entrepreneurs as we delve into what women should do to advance their careers, and become leaders in the corporate world and their own enterprises.
  • Book of Lists Party
    Save the date - January 15, 2015 for PBN's Book of Lists Party at the Providence ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement