Sacramento Economist: End Of Employment Benefits Economically Better In Long Term
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SACRAMENTO (CBS13) – More than a million Americans are holding out hope that something can be done to keep them from losing the checks they depend on to live before they lose everything else.
Thousands of Californians are also affected by the unemployment benefits expiring Saturday. But one Sacramento economist is offering some hope, saying this could be good for the economy in the long term.
In the long term, it could actually create more jobs, but in the short term — however — it will be bad for the local economy.
“With unemployment benefits ending, it’s pretty stressful,” said Michael Slish.
The Sacramento father says he’ll no longer get help supporting himself and his two kids as unemployment benefits expire.
“I’m at my wit’s end because I apply and apply and apply,” said Slish.
After months of trying to find a job, Slish’s unemployment is ending. He’s out of life lines, but far from alone.
“I still don’t have a job,” he said.
All 37 weeks of unemployed benefits from the federal government expired Saturday, leaving laid off workers only 26 weeks of unemployment pay from the state.
“Our economy is still trying to recover,” said Sacramento State Dean of Business Sanjay Varshney.
The economist predicts losing the extension money means fewer people spending money.
“When consumers stop spending money in our local economy, our economy is more vulnerable,” he said.
That will have a trickledown effect, Varshney says, with the service sector being hit hard. Then, those with already low paying wages could lose their jobs.
“The jobs that have been created more recently are minimum wage jobs,” said Varshney.
However, he says the loss of the extension benefits may actually be better for the economy. Instead of using the $45 billion to pay unemployment, Congress could use that money on projects which in turn create jobs.
“Use this opportunity to create more meaningful jobs,” said Varshney.
But for now, Slish says he’s desperate to land a job after nearly a half year of looking.
“I’m hoping I have a job tomorrow,” he said.
On Friday, the president called two senators who are sponsoring a bill to extend the jobless benefits. Lawmakers are expected to vote on the extension when they return from recess on Jan. 6.