South By North Strategies, Ltd.

When Congress returns next week, it will consider whether or not to extend the recovery act provisions related to unemployment insurance set to expire at the end of the month.  A new report from the Economic Policy Institute  finds that extending those provisions would generate the equivalent of over 720,000 full-time jobs in a cost-effective manner. From the report …

Using a methodology described in Mishel and Shierholz (2010), we find that of the $104.7 billion increase in GDP related to continuing the unemployment extensions through 2011, some 37.4%, or $39.1 billion, will be recouped both in higher revenues, as more people and firms pay taxes, and in lower expenditures. Consequently, the effective cost to the budget of continuing the unemployment insurance extensions for a year is $25.9 billion instead of $65 billion. This means that the continuation of unemployment insurance extensions through 2011 will create 723,000 full-time-equivalent jobs at a cost of less than $36,000 per position. That alone is a good deal for all involved, but when we remember that these expenditures will at the same time be providing a lifeline to millions of families of the long-term unemployed during the worst downturn in seven decades, the case for continuing the extensions could not be clearer.