Unemployment Checks Replacing Payday Cash for Millions
Consumers using unemployment as payday cash may have to rely on it longer than expected. The unemployment rate is at 9.7 percent and more than 11.4 million workers in the nation have lost their jobs. The recession created a difficult time for Americans, and a huge number lost their jobs. Part of the bigger problem, though, is that experts believe many of those jobs are gone forever. In particular, jobs in the fields of real estate, construction, manufacturing and financial services were hard-hit. Workers in these sectors may have to reconsider their career choices altogether and create new employment goals.
Americans relying on unemployment
Millions of Americans are seeking jobs while relying on unemployment checks to sustain themselves and their households in the meantime. In the past, unemployment pay was set to last for six months, the official insurance limit on the program. However, difficulties and a down economy have forced the federal government to extend payments to as long as 99 weeks in some states. That’s the longest period unemployment has ever been extended since its inception.
The critics weigh in
Unemployment benefits are not being extended without criticism. There is now a political debate over the extensions. The cost of unemployment is $10 billion a month for the government and many legislators are questioning the move. Senator Jim Bunning recently made moves to extend benefits, but was attacked by Congress members who believe the cost is too high for the nation. For example, Senator Jon Kyl believes that extending benefits does little to encourage people to find work. They may become lax in finding jobs and seeking to change their financial positions.
The numbers speak for themselves
Despite Kyl’s position, the numbers on unemployment are showing otherwise. The National Employment Law Center showed that the main reason people are out of work is not due to comfort. There are six unemployed Americans for every available job in the market. In addition, many of the Americans who are looking for jobs are not qualified for the positions in need of filling. Those who are seeking payday cash are looking in as many different places as possible. Desperation is pushing people to consider job options they may have previously overlooked.
Unemployment benefits were created in 1935 as part of the Social Security Act. The purpose of the fund was to sustain the unemployed as the economy wavered. Throughout the years, it has proven effective and helped millions of Americans pay bills, stay in their homes and remain financially afloat until new jobs became available. Studies have shown that about 67 percent of unemployed people take advantage of the fund. The bulk of the fund comes from employer taxes, but in times of unusual financial stress, the funds have been extended then scaled back when things return to normal.
The verdict on unemployment and its extension
Despite some debate, the decision to extend unemployment is most likely going to remain intact. Most people use unemployment checks the same way they would use payday cash. They put the money directly back into the economy. Due to a lack of discretionary spending, most of their unemployment check is channeled right into the market. That is the overall goal of the government-to spur people into spending and reinvigorating the economy.