Emergency Unemployment Benefits Expire, What' Next?

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Dec. 31 (Bloomberg) -- Bloomberg's Nela Richardson reports on the economics of unemployment benefits. She speaks on Bloomberg Television's "Market Makers." (Source: Bloomberg)

Benefits?

They ran out over the weekend.

Is this a disincentive to job hunters?

This is the one economic issue that has not recovered from the great recession.

We have seen the stock market rebound, housing, but there is this iceberg called long-term unemployment than simply has not melted.

Currently 2/5 of the unemployed are long-term, and these benefits help to cushion those who could not find work long- term.

The cbo and other research organizations have shown extending benefits actually helps buffer demand in the economy, helps businesses over the long-term, so yes, it is good for workers, but also good for the economy to extend these benefits.

People raise quality of growth questions about that kind of economic growth, whether the spending from the long-term unemployed is really doing all that much for the american economy, other than passing tax dollars from one group of americans into the pockets of others.

We all pay for these benefits.

Every worker in this country pays for this in their paycheck for unemployment insurance.

This is not unique.

In every recession there is an extension of benefits for those workers that find themselves out of work involuntarily.

That is the key.

These are people who did not quit.

These are people who were laid off.

More importantly, the characteristics of the unemployed are interesting.

They are older and more educated.

Or that reason alone, it is harder for them to find a job in this economy that is creating a lot of part-time work thomas but not a lot of good full-time jobs with benefits.

At the same time, this will drop the unemployment rate sharply.

Go beneath the numbers and tell us what will happen there.

It is really important to be cautious of the headline number.

Because you have to be actively looking for work to get these extended benefits, it keeps people engaged in the job market.

They are in the market looking for work and they are counted as among the unemployed.

What economists are concerned about, when you allow these benefits to expire, as they have, is that people will give up, stop looking for work, and leave the labor market entirely.

The plus side for those that only look at headline numbers, is that the unemployed rate decreases, but it is a false decrease.

We have lost workers in the economy.

The important thing is to keep workers attached to the labor market, and it is thought that benefits will do that.

I suspect this debate will remain a thorny one, particularly for congress.

Nela richardson, happy new year.

The right way to drink champagne.

We have an expert here who is

This text has been automatically generated. It may not be 100% accurate.

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