We've heard it a million times before. The horrible personal toll that comes of terminating unemployment extensions. People lose their unemployment extensions and they have nothing. They're likely to lose their homes, get evicted, lose their transportation. And ultimately many of them will qualify for public assistance in the end, shoving many Federal expenditures onto the States themselves, passing the buck on down, and generating little in the way of a net savings for government entities.
What we hear less of, however, is what the cuts in unemployment extensions will do to the communities at large.
Consider that if unemployment extensions aren't granted, 35,000 people in Michigan alone will instantly lose their unemployment benefits. WHAP! Gone.
That's about $49 million PER MONTH sucked out of the Michigan economy, right before Christmas -- the time of year most retail businesses need to make a commanding majority of their annual sales if they're going to make it through to the next year and keep people on the job.
And those losses will be concentrated, almost TARGETED at the hardest hit communities; Those with a higher population of people relying on unemployment benefits.
I don't talk about this nearly enough: violent crime has gone through the roof in Muskegon, with two young people killed and another two wounded through gun violence in the past two months. People are strained to the edge and it's starting to manifest in violence and higher crime, even as police forces are shrinking.
Communities like this CANNOT take another hit.
Michigan saw a net gain of 65,000 jobs in 2010. But U3 unemployment, the lowest measure, still has unemployment levels at 13% for the state, more for individual regions. Terminating unemployment extensions will effectively cut those job gains in half, crushing the life out of any meager economic progress we may have seen over the year...
...and right when local businesses need it the most: Christmas.
Will that CREATE JOBS or DESTROY JOBS? From cutting 35,000 out of unemployment benefits, MANY MORE people will absolutely fall directly into unemployment eligibility from the local economic consequences.
It doesn't take an genius to realize that if CURRENTLY unemployed fall into other social programs, and we get NEWLY unemployed people because of a drop in economic activity --> The net savings to the Government is likely to be NEGATIVE.
Government entities will LOSE money from cutting unemployment benefits.
Especially if the lousy Christmas season drives some businesses under...and we see a sudden reduction of tax revenue from small businesses.
And it's going to get WORSE.
By April of next year, over 120,000 people will have seen their unemployment extensions slashed in Michigan alone, sucking $168 million per month out of the Michigan economy, over $2 billion for the year, and wiping out the benefit of seeing a 2010 with 65,000 person net job growth.
And I need to stress again...all this will hit hardest at the regions already holding on by a thread.
Many cities around America are literally HELD UP by unemployment extensions...and need to be until they get back to their feet. And they ARE getting back to their feet.
But NOW is not the time to kick them in the face again.
Ending unemployment extensions will be like dropping a bomb on Muskegon.