Long-Term Unemployment Leads to Poverty

By Covering Business     March 14, 2012

As millions of workers have lost their jobs over the last five years, many have turned to unemployment insurance, a program designed to help bridge the income gap between jobs.

In some states, unemployment insurance provides up to 99 weeks of aid. After that, the jobless are typically referred to longer-term welfare programs.

Since 2007, about 5.5 million Americans have exhausted their 99 weeks of unemployment insurance. To get a sense of how they’ve managed, the Government Accountability Office conducted a study of their economic situation and whether they were receiving additional aid. Among their findings:

• In January 2010, the jobless rate of people who had exhausted their unemployment insurance was 46%.

• The poverty rate among those had used up their benefits was 18%. The rate for all adults of working age is 13%.

• At least two out of every five people who had used up their benefits had income of more than 200% below the poverty line.

• A minority of people who exhausted their unemployment insurance enrolled in a longer-term welfare program.

Read the full study (PDF).




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