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Sequestration Is Eating Up 15 Percent of Some Unemployment Benefits Sequestration Is Eating Up 15 Percent of Some Unemployment Benefits

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Policy

Sequestration Is Eating Up 15 Percent of Some Unemployment Benefits

Crowds of job-seekers wait to enter a 2011 job fair at Crenshaw Christian Center in South Los Angeles.(AP Photo/Reed Saxon)

photo of Niraj Chokshi
July 2, 2013

Critics of government spending have long complained that the sequester fears were overblown: The across-the-board spending cuts were not and will not be apocalyptic. And, in a lot of ways, they were right. Half of the doomsday predictions that The Washington Post looked at this week never happened, the paper reported. But that doesn't mean the sequester was a big dud.

Some 680,000 of the Defense Department's civilian personnel nationwide will begin taking occasional furlough days starting next week through the end of the year. And sequestration has reduced unemployment benefits across the country by more than $100 a week in some states, according to the National Employment Law Project.

As of three days ago, some recipients in New Jersey—those receiving the maximum amount of benefits—will see a reduction of as much as $139, or one-fourth of what they currently get. Nationwide, sequestration is eating up about 15 percent of the average unemployment recipient's payout of $289 a week.

 

Of course, that share varies by state. In New Mexico, for example, an $82 cut translates to about 25 percent of the average weekly benefit, while the cuts in many states amount to roughly 10 percent, according to NELP's report. All told, 1.9 million people nationwide are affected.

The cuts affect individuals who have exhausted their state benefits and have had to turn to the federal government for further assistance. Many of the people who fall into that category qualify as being long-term unemployed, a group whose ranks have swelled during the economic downturn.

The plight of the long-term unemployed—those who have not held a job for 27 weeks—has quickly become one of the most pernicious problems in the recovering jobs market. Individuals out of work the longest are more prone to emotional and psychological problems and find it increasingly hard to regain employment, studies have found.

As seen in the graph below, the share of unemployed individuals out of work for at least 27 weeks has skyrocketed during the recession and recovery.

 

 

 

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