500K Jobless Lose Benefits Earlier Than Expected

...in just the first 6 months of 2012
By Kevin Spak,  Newser Staff
Posted May 29, 2012 7:31 AM CDT

(Newser) – Come June, about 70,000 people will lose long-term unemployment benefits sooner than they expected, bumping the number of people who've had the rug pulled out from under them in the first six months of the year to nearly 500,000, the New York Times reports. Congress renewed its extended unemployment program in February, but reduced the maximum number of weeks from 99 to as low as 63. How quickly benefits disappear is determined largely by how much unemployment has increased recently, meaning hard-hit states like California, which has 11% unemployment, lost benefits early because things hadn't gotten worse.

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Extended benefits are controversial; liberals argue that they're an effective form of stimulus, while conservatives complain that they encourage prolonged joblessness. "People are subsidized to become a structural unemployment problem," says one conservative economist. But "if you just reduce the weeks of unemployment for people already unemployed but don’t do anything else, it’s a bad deal, because they’re already about the worst-off people in society." Some states have made things even tougher; Florida, for instance, changed its application procedures, and now rejects half of all new claims. (Read more unemployment stories.)

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