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Latino Daily News

Friday November 23, 2012

Unemployment Insurance Kept 2.3 Million Americans Out Of Poverty Last Year

Unemployment Insurance Kept 2.3 Million Americans Out Of Poverty Last Year

Photo: Unemployment benefits

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By Travis Waldron, ThinkProgress

America’s unemployment insurance program is not as robust as those in many industrialized nations, but the program that is speeding toward massive reductions if Congress doesn’t extend it before the end of the year still kept more than 2 million Americans out of poverty in 2011.

According to the National Employment Law Project, which is calling on Congress to re-authorize the federal unemployment compensation program before the end of the year, unemployment insurance kept 2.3 million out of poverty, cutting the number of Americans who were entered the ranks of poverty last year in half:

Were it not for unemployment insurance, the increase in the number of Americans living in poverty would have doubled over the last year. (While the number of people in poverty grew by 2.3 million from 2010 to 2011, unemployment insurance prevented an additional 2.3 million Americans from joining their ranks.)

Unemployment insurance is generally handled by the states, but because long-term unemployment was exacerbated during the Great Recession, Congress enacted the Emergency Unemployment Compensation program in 2008. If the federal program isn’t extended by the end of the year, 2 million Americans could lose unemployment benefits, and another 1 million will join them in the early part of 2013. More than 500,000 recipients lost benefits earlier this year because of the way the program is administered and because Congress reduced eligibility for it.

Republicans have pushed against past extensions of the program, arguing that it creates a culture of dependency on federal benefits that reduce the incentive to find work. But the federal program requires workers to search for jobs, and studies have shown that recipients look harder for jobs than those who don’t receive benefits. Meanwhile, in industrialized nations, there is no proof that more generous unemployment insurance programs lead to higher levels of employment: Greece’s unemployment rate, for instance, has soared even though it has one of the least generous programs in the world, while Israel boasts both a generous unemployment program and a falling unemployment rate.