The Shriver Brief : Poverty Law Commentary & Insights : Sargent Shriver National Center on Poverty Law : Affordable Housing, Healthcare Reform

A recent editorial in the Chicago Tribune professes to have some "heart" for the long-term unemployed, but it calls upon Congress to vote down an extension of unemployment benefits anyway. We disagree. Congress should approve the extension as soon as possible.

Some may blame lingering unemployment on the unemployed, accusing them of failing to look for or take jobs "on employers' terms." But the main cause today is that there simply are no jobs. There are currently five workers for every job opening, according to a U.S. Department of Labor survey of employers. In normal times, this ratio is one to one. In the last recession, it was two to one. Employers are not waiting for workers to show up for vacant jobs. There is no relationship whatsoever between unemployment benefits and American productivity; indeed, even if an insured worker fails to take a job (which we do not concede), there are millions of uninsured and unemployed workers to snap them up.

In fact unemployment insurance allows laid-off workers the ability to preserve their retirement accounts and life-insurance policies, it helps them avoid foreclosures and bankruptcies, it maintains a minimally decent standard of living and it keeps them consuming goods and services. They buy things with the benefits at stores who employ people, who get paychecks and who make their own purchases. This "multiplier" effect has been estimated at $1.61 of positive economic impact for each dollar of benefits.

Yes we can and should have a "heart" for these workers, but we should also know that unemployment insurance helps to fight the recession and maintain jobs. Its minimal cost is well worth it.

This post was co-authored by Andrew Stettner, deputy director, National Employment Law Project, and Carrie Thomas, associate director, Chicago Jobs Council.

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Most people rejoice when they find out they are getting a raise. But for low-income people, that joy may quickly turn to frustration when they realize the modest increase in income may cause a loss of hundreds of dollars in food stamp benefits. 

People across the country faced this challenge when the $25/week increase in Unemployment Insurance contained in the American Recovery and Reinvestment Act (the federal stimulus bill) took effect in March. For some, this modest increase in income pushed them off the “cliff” of aid programs as the extra money was more than offset by a loss in food stamp benefits.

Low-income families face similar challenges each day, with their steps toward independence cancelled by a loss of a work support such as food stamps. Ideally, working families are phased off of aid programs, with their benefits gradually decreasing while their incomes increases. This approach rewards work and provides the support necessary for a family to sustain its success.

But, eligibility for food stamps for most families is strictly capped at 130% of the Federal Poverty Level, or $1907/month for a family of 3. As a result, a household whose gross income exceeds this amount is ineligible--regardless of how much the family actually has available to purchase food after allowable expenses for rent, utilities, and child care. For example, a family of 3 whose monthly income increases by $100, from $1850 to $1950 per month, may lose over $300 in food stamps. Rather than being rewarded for its accomplishment, the family is left less financially secure.

Fortunately, states have the option of raising this cap, bringing more federally funded food stamps to needy families and their communities. Through a policy maneuver known as “categorical eligibility,” the “cliff” can be reduced so that families are eased off of assistance as their earnings increase. Such a policy reduces the number of families who earn too much to receive assistance but not enough to survive. By raising the gross income limit for food stamps, a state can prevent families from being penalized for their successes.

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