To be honest, I had written off extended unemployment benefits. Senate Republicans, it seemed, had the votes to block any new unemployment compensation measure, and some Republicans were starting to talk about doing away with unemployment compensation entirely.
Washington insiders, though, say that unemployment compensation may have a second chance in the coming week. Part of the reason is the chilling effect seen in consumer spending last month when extended unemployment compensation lapsed.
People talk about unemployment compensation as if it only affects the decisions of people who are jobless, but it affects far more people. The prospect of losing unemployment compensation entirely, or having it cut off after just 26 weeks, means that everyone has to plan on the possibility of a complete loss of household employment income in the near future. Millions of workers know their employers are considering new layoffs — but most layoffs occur at companies that haven’t given any hint of such a move, so every worker has to consider the possibility of losing a job without warning. Unemployment compensation can soften this risk — but if the Senate is talking about repealing unemployment compensation, that means that everyone has to hold on to more money to guard against future loss of income. It’s a consideration that affects everyone who has a job.
The stock market rallied yesterday, advancing 2 percent when the reports of movement on unemployment compensation came through. This highlights the fact that unemployment compensation does not merely affect workers, but also businesses that have workers and members of their households as customers.
If the Senate can barely muster enough support to hold a vote on unemployment compensation, it is not really that reassuring. Workers will still have to be financially cautious because of the possibility that the vote might not take place next time. But it is still more reassuring than last week’s talk around the Senate, when some of the more conservative-minded senators were talking about the merits of ending unemployment compensation and forcing unemployed workers to fend for themselves.