The long-term unemployed will face greater financial strains starting April 1, 2013. As part of the sequestration tax cuts, federal unemployment insurance will take a 10.7 percent cut.
Eligible workers collect state benefits for the first 26 weeks, approximately 6 months, of their unemployment. In response to the the volume of Americans out of work as a result of the Great Recession, the federal government extended emergency unemployment compensation (EUC) to those who had lost their jobs from week 27 to 67. This provided workers with income for over a year while they attempted to find a new job .
Those who collect state-level benefits will not see any change in April 2013. However, according to Maurice Estelle, policy co-director at the National Employment Law Project, the almost 2 million people currently collecting benefits will face an almost 11 percent reduction, reports NPR.
"It also shoots the economy in the foot.. Unemployment benefits have a very good stimulus effect, because people spend all of [them]. So, on humanitarian and economic grounds, there are better targets." commented Rick McHugh also with the National Employment Law Project, according to the Philadelphia Inquirer.
The decrease in benefits coincided with sighs of economic strengthening in late March 2013. Unemployment descended to four-year lows, the economy added approximately 200,000 new jobs in the first two months of 2013 and construction showed hiring growth as the real estate market increased in value.