Three days after Christmas this year, nearly a million Americans will lose their unemployment benefits. The problem for once isn’t a lack of money; there’s plenty in the Unemployment Trust Fund to cover the extension. The problem is priorities. Working families who can’t find jobs and are losing their economic lifeline don’t seem to be important these days.

President Bush failed to even ask Congress to pass a 13-week extension for unemployed workers to receive jobless benefits, even as he insisted that Congress pass a bailout bill for insurance companies. He happily signed the insurance companies' bill into law two days before Thanksgiving. But not a word about the unemployed was heard in the White House Rose Garden. And Congress showed no initiative of its own to step in and act. Sen. Maria Cantwell (D-WA) said the House was “playing Ebenezer Scrooge with unemployment benefits.”

Here in Washington, about 50,000 people will lose their benefits on Dec. 28, with another 10,000 losing benefits weekly after that. With our state’s sluggish economy, the prospect of unemployed workers finding jobs seems unlikely. Our unemployment rate is nearly 7 percent, among the highest in the country. So if you have a job, and don’t feel sorry for those who are jobless, why should you care about all this?

You should care because unemployment benefits are our first line of economic defense in a recession. The only reason our economy hasn’t slid deep into a major recession so far has been because consumer spending hasn’t fallen off too much… yet. When people lose their jobs they have to cut spending, but with unemployment benefits they can maintain at least a minimum level of spending to pay the rent and utility bills and buy groceries and gasoline. The average weekly benefit of $311.27 may not be enough to cover all the bills, but it helps people avoid complete destitution. But the benefits aren’t just a kindness; they’re an economic stimulus.

A recent study of the economic impact of unemployment benefits commissioned by the U.S. Department of Labor found that jobless benefits produce $2.15 in increased economic activity for every $1 paid in benefits to laid off workers. Looking at the last five recessions, the study estimated that those recessions were 15 percent milder than they would have been otherwise without the positive impact of unemployment benefits. 

In our state over the last year and a half, the Washington economy has been infused with $800 million in additional spending from state unemployment benefits, and a net benefit of more than $1 billion from state and federal funds. And we know that jobless workers spend those benefits at the stores in their local towns and cities. Imagine the depth of our recession if that money hadn’t been spent!

That’s the threat we face now. With the failure of the federal government to extend benefits, we may soon see the economy turn down even farther. Fortunately, organized labor in 1993 managed to win a state extended benefit program that will carry some unemployed workers for an additional 13 weeks beyond the basic 26 weeks allowed under the federal program.

Business groups often complain about the costs of unemployment insurance premiums. Too often, business looks only at the “cost” of the premium and not the benefit of getting a unemployment check spent in their stores. This one-sided “business climate” approach is like looking at a stock’s value by only looking at corporate expenses, ignoring corporate earnings. Many businesses, especially in the retail and small-business sectors, directly benefit from the basic consumer spending by workers with unemployment checks.

In addition, high-pressure lobbying has completely exaggerated the true unemployment insurance premium cost. To hear the lobbyists tell it, employers are paying hundreds of dollars a year per employee in premiums. In fact, more than half of Washington’s employers pay between $67.45 per worker per year and $262.20 per worker per year, or from between $5.63 to $21.85 per month per worker. By any measure, including a “cost-benefit” analysis, the program is a bargain.

Jobless workers want a job, and are in an active search to find one in order to qualify for and receive unemployment benefits. The best approach we could take now would be an economic policy that would create new jobs and reduce our unemployment rates. But until we get a new economic team willing to make the economy and jobs a priority, we must make do with the front line defense of unemployment benefits.

Rick Bender is President of the Washington State Labor Council, the largest labor organization in the state.