39,559 Georgians set to lose extended unemployment benefits on Dec. 28

From the Georgia Department of Labor:

ATLANTA — Emergency Unemployment Compensation (EUC) benefits for the nation’s long-term unemployed workers is set to end Saturday, Dec. 28, impacting 39,559 workers in Georgia.

EUC is a federally funded benefit for long-term unemployed workers who have exhausted regular state unemployment insurance (UI) benefits. The maximum weekly benefit is $330, while the most recent average weekly benefit is $253.

A few points:

  • Despite persistent caricatures to the contrary, the long-term unemployed are required to keep looking for jobs to continue to receive benefits. These are people who had jobs that were lost through no fault of their own, or they would not have begun receiving benefits in the first place.
  • Despite even more persistent caricatures, no one is living large on unemployment benefits in Georgia. $330/week is a pretty low cap.
  • Despite population growth of at least 6 percent since 2008 (maybe closer to 9-10 percent), the Savannah metro area still has fewer payroll jobs than we did at the end of 2007 and in early 2008.

There are likely only 1,000 or so Savannah metro area residents among those 40,000 Georgians who will lose extended unemployment benefits at the end of this week (right between Christmas and New Years). What will be the impact of that?

I suspect that most of those long-term unemployed will drop out of the labor force entirely. Some might move — or already have moved — in with family or friends. Some might be in multi-income household and undergo another round of belt-tightening.

Since unemployment benefits are so low, it’s generally thought that a high percentage of that money is spent and therefore helps buoy the local economy. That means an overall reduction in spending of at least $200,000/week in the Savannah metro area. That’s not enough of a decline to be noticed, but that decline will be yet another drag on a slow recovery.

I’ve got more about the local labor market in my dreary Christmas Eve City Talk column in the Savannah Morning News tomorrow.