Tough road ahead as Quinn lobbies for extension of unemployment benefits

Illinois Governor  Pat Quinn along with 21 other governors sent a letter to the Obama administration and lawmakers in Washington pushing for another extension in unemployment benefits.  The group Of Governors seeking the extension are likely to receive resistance to the extension as such legislation could create a technical increase in the unemployment rate that the White House would like to avoid.  

Governor Quinn, acting on behalf of the 450,000 Illinois citizens currently out of work, supports an extension of benefits beyond the current 79 weeks provided to Illinois citizens as the State could see an additional 40,000 citizens lose unemployment coverage by the end of the year.  Quinn's office says 13,000 citizens have already exhausted benefits and as the number of available jobs continues to remain low, that number is likely to rise.

The problem for Quinn and other Governors rests in the political implications of the Federal government further extending unemployed insurance benefits.  The nation's adjusted unemployment rate, long considered the mainstream benchmark for unemployment, remains at 9.7%.  However, the adjusted figures fails to include 11.4 million Americans who are working part-time despite seeking full-time employment, or are "marginally attached" meaning they have exhausted benefits or given up on seeking employment.  As a result the Department of Labor reports the "real" unemployment rate as 16.8%.   The challenge that exists for proposals in the extension of unemployment benefits rests in the reality that the Americans who are no longer included in the adjusted unemployment rate after they exhaust benefits would now be counted.  As a result, if Washington extended unemployment insurance the adjusted unemployment rate would skyrocket and the political implications would be devastating to the Obama Administration.

As an example, in the past two months, some 400,000 unemployed Americans who remain out of work were no longer included in the adjusted figures as they had exhausted unemployment benefits.  If those workers alone were included the adjusted unemployment figures would already be over 10%; let alone if all 2.1 million "marginally attached" Americans were included.  For this reason alone, we have not heard any chatter out of Washington pushing for another extension of unemployment benefits.  Although the extension would typically help congressional Democrats, an unexpected jump in the adjusted unemployment rate would be devastating to the President's approval rating.

In the end, Governor Quinn and his counterparts in other states are carrying out their duties to their citizens, but unfortunately any debate over an extension in Unemployment benefits is likely to take a back seat to the potential political implications of such an extension.