Congress, Don't Scrooge the Jobless

Extending unemployment benefits immediately would save what otherwise will be another dismal holiday season for American retailers.

By David Elliot

With the mid-term elections wrapped up, it's time for another vote--one that will affect millions of Americans, our economy, and our country.

Congress faces a crucial decision: whether to extend unemployment benefits for the millions of Americans experiencing the brunt of our so-called "jobless economic recovery." If lawmakers fail to act, it will be a grim holiday season for too many people.

The nonpartisan National Employment Law Project (NELP) estimates that two million Americans will lose unemployment benefits by early December, if no extension is forthcoming.

Some of us may look at the election results and argue, "Didn't the American people just vote against government spending?" No. There were a variety of reasons people voted the way they did this year.

If you look at the polls, Americans favor helping the unemployed, just as they favor ending the Bush-era tax cuts for the wealthiest Americans and preserving the safety net for seniors and others in peril during this economic crisis.

Actually, the No. 1 issue of concern to Americans isn't government spending. It's the economy, especially jobs. For the sake of the country, lawmakers should make reviving the economy their top priority for the rest of this year. Democrats should realize they were elected to do a job--and they should do it. Republicans should realize with leadership comes responsibility--and we didn't hold a referendum on Nov. 3 about how we should treat people who are unemployed through no fault of their own.

One could debate the various ways of doing this. But the quickest, most effective way to achieve some success would be to extend unemployment benefits immediately, in time to save what otherwise will be another dismal holiday season for retailers.

Economists argue, and the National Employment Law Project notes, that unemployment benefits stimulate growth. Why? Because unemployed people spend their benefits on necessities, such as mortgage payments, utilities, food, and items at the discount store. NELP says this spending may have created 1.15 million jobs in 2010 alone.

We don't know when the economy will improve. But the government can speed up the process--especially as we enter the holiday season, a cornerstone of the U.S. economy. The retail industry accounts for 13.4 percent of the nation's private sector workforce. Department stores, electronics chains, and discounters count on holiday sales for more than one-fifth of their total annual revenues.

We've seen what happens when unemployed people don't shop. In 2008, before Congress approved benefits for the newly unemployed, holiday sales dropped nearly four percent from the previous year. It was the first decline since the Department of Commerce began tracking retail sales in 1992.

During the disastrous 2008 holiday season, retailers hired only 231,000 workers--well under half of the 618,000 hired the previous year. Fewer sales mean fewer jobs. Fewer jobs mean a sluggish economy and more extended unemployment. And the cruel and vicious cycle of the Great Recession continues. Our lawmakers can vote to stop it.