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 High unemployment has been a problem for so long that the news media (and much of the public) has gotten bored with the subject. That's why few are even aware that the 99 weeks of unemployment support we've gotten used to will end in just a couple weeks.

 As we’ve explained previously, EB [extended benefits] will no longer be available in any state, not because most states’ economies have improved to anywhere near pre-recession conditions, but because they have not significantly deteriorated in the past three years.
 In fact, the current high unemployment rate of 8.2% is expected to rise to 8.4% by the end of the year. Far from eliminating extended unemployment benefits because they are no longer needed, 500,000 people (so far) are having their last lifeline cut with little hope of gaining meaningful unemployment.

 Cullinan is among about 1 million long-term unemployed Americans whose jobless benefits are phasing out this year as the federal government reels in Great Recession lifelines that provided unemployment checks for as long as 99 weeks in many states. By year's end, another 2 million will see their checks cut off sooner than Cullinan's were, because extended unemployment benefits, beyond the standard 26 weeks that states pay for, will end. Congress could renew the program, but many economists say that's unlikely.
 In case you werren't following the math, that's three million unemployed people no longer able to collect any benefits by the end of the year. That's an economic disaster.
   This trend has been in effect since the start of the Depression but has been accelerating in recent years.
 The number of jobless workers has fallen from over 15 million in early 2010 to about 13 million now, but the share of unemployed workers collecting jobless benefits has dropped more sharply. It was about two out of three in 2010, but it's less than one in two now. Next year, only about one in four will receive payments, according to the National Employment Law Project.
    "There's going to be lots of people without any income still unable to find a job," said George Wentworth, a senior staff attorney for NELP. "You're going to see these people not be able to feed their families and not able to pay their mortgages. It will have a devastating impact on a lot of local economies."
 Devastating is a good word for this. Devastating for families. Devastating for individuals. Devastating for the economy in general.

  In fact, the effects on the economy are already being felt.
While most economic numbers have been going up recently, two critical ones have reversed and declined:
  1.) Local Fed surveys, such as Philly and Dallas, show contraction in manufacturing. This can probably be chalked up to weakening economies in Asia and Europe.
  2.) Collapsing retail sales numbers.

 The outlook for the U.S. economy appeared dimmer Monday after a report that Americans spent less at retail businesses for a third straight month in June.
    Spending in June fell in nearly every major category — from autos, furniture and appliances to building, garden supplies and department stores. Overall, retail sales slid 0.5 percent from May to June, the Commerce Department said.
   Retail sales hadn't fallen for three straight months since the fall of 2008, at the height of the financial crisis.
 Manufacturing numbers can be attributed to external factors, but these poor retails sales can't. In fact, this dramatic slump in retail sales is happening at the same time as the cutting back of federal unemployment benefits to the long-term unemployed.
 According to a report released by the United States Department of Labor in November 2010, for every dollar spent on unemployment insurance, economic activity increases by two dollars. The Congressional Budget Office estimates that every $1 billion spent on unemployment benefits creates 19,000 jobs. This means in addition to the loss of $650 million in spending in June from the cuts in extended unemployment benefits, the economy lost close to 13,000 jobs in June...
   The impact of less disposable income is being seen by multiple retailers. Best Buy (BBY) is cutting 2,400 employees, including 600 from its vaunted Geek Squad. Retail sales in general posted their worst results in three years. Not coincidentally, the last two Junes included a lot more extended unemployment checks. Large general category retailers Costco (COST) and Target (TGT) saw their June sales fall 6% compared with June of 2011.
 Before you get mad at Congress for cutting these benefits under such conditions, recall that it isn't just happening at the federal level. Many states are slashing benefits as well.
 Some states, including Illinois, Michigan and South Carolina, have trimmed even initial benefits to less than 26 weeks, and some have cut the size of payments and restricted eligibility. Florida residents must apply online and take a lengthy skills test, keeping some from receiving unemployment insurance.
    Under the federal compromise, states are truncating the second phase of benefits, which helps people unemployed from 27 to 79 weeks, when their jobless rate falls below certain levels. The reduction in so-called emergency unemployment compensation will affect about 600,000 recipients through December and 2 million more at year's end, NELP said.
 So far, six states have their normal unemployment benefits below 26 weeks.
   States, which must balance their budgets every year, have less room for error. But before you give them a pass, consider that states spend the previous decade reducing their UI taxes and leaving themselves underfunded.
 “Thirty‐one states reduced UI taxes by at least 20 percent between 1995 and 2005.” Meanwhile, from 2000–09 the average UI contribution rate was .65 percent of total wages, “the lowest in the life of our federal‐state UI program.” That left many of the reserves underfunded, especially when they were called upon to respond to the financial crisis.
 I don't know exactly how all these people losing their last, tenuous lifeline will effect their status in the labor force. Without a doubt, many of these people will stop being counted, thus reducing the official "unemployment rate" without actually changing the situation on the ground.
    Nearly 2 million young people are no longer counted as part of the labor force because of the horrible employment situation. With three million people losing benefits prematurely this year, it's possible that the headline unemployment number might actually drop somewhat more than the Fed expects.
   Then Obama can declare how he has improved the economy, while Romney complains that Obama was really born in Kenya (or some such nonsense), and both campaigns can ignore the reality of suffering Americans.
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