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Extra aid buys laid-off workers a little time

Some stimulus dollars are already circulating but may not provide enough help for the jobless.

By Yvonne ZippCorrespondent of The Christian Science Monitor / March 5, 2009

A man considered his next move at a March 4 job fair at Miami Dade College in Florida.

Carlos Barria/Reuters

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Kalamazoo, Mich.

By now, it’s certain that at least a little of the $787 billion in federal stimulus money has reached some Americans’ pockets and is circulating in the economy. The pipeline: unemployment checks.

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The economic recovery package President Obama signed two weeks ago gave people drawing unemployment a $25-a-week boost in their benefit and extends through year’s end the time the jobless can qualify for federal extended unemployment benefits. Texas and Florida are among the states already sending out the slightly heftier checks.

The most important question for many Americans is, how long will it take for the stimulus to work? But for the 6.5 million people collecting unemployment, the real nail-biter is this: Will the extra help be enough to carry them forward to their next job, and, hopefully, a measure of financial security?

Tim Dykes, a jobless electrician in Elkhart, Ind., where unemployment is at 15.6 percent, is not sure the weekly bonus will be enough to help him. He’s pretty certain this recession will cost him the house he’s owned for 19 years. Still, he’s glad of the stimulus program.

“Mentally, I find it hopeful,” says Mr. Dykes, who was laid off in August. “I have hope for the president and hope for what he’s doing. But I can’t see it helping me – except that they’re trying to do something and they’re aware there’s a problem.”

Big-bang stimulus

As a short-term stimulus, extending unemployment benefits provides more bang for the buck than anything in the plan besides increasing food stamp benefits, according to a Moody’s Economy.com analysis. Every dollar spent on extending benefits generates $1.63 for the economy, Moody’s found. (Increasing food stamps provides $1.73 for every dollar spent.)

“It’s not only humane – it’s good for the economy,” says historian Frank Stricker of California State University at Dominguez Hills, who is writing a book on unemployment in America. The share of jobless workers who’ve been out of work 15 weeks or longer has climbed from 33 percent in January 2008 to 39 percent this January, he notes, citing figures from the US Bureau of Labor Statistics. “That’s going to keep on rising. That kind of speaks to why we need extended unemployment benefits.”

Ordinarily, laid-off workers can collect unemployment benefits for 26 weeks. Under the stimulus plan, workers can receive up to an additional 20 weeks to 33 weeks of benefits through December 2009, depending on whether they live in a “high unemployment” state. (At least 30 states currently qualify as “high unemployment.”)

GOP governors skeptical

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