Long-term jobless benefits aid discounters

Mitchell Hartman Dec 7, 2011

Kai Ryssdal: Let’s say you’ve lost your job in the past three years or so, and you went on unemployment. Once your state benefits ran out, extended federal benefits kicked in. In states with high jobless rates, you might’ve been getting benefits for as long as 99 weeks.

If Congress lets that program run out — and they’re debating that right now — it’s not just the unemployed who’ll notice. Marketplace’s Mitchell Hartman reports.

Mitchell Hartman: So, what do the unemployed spend their unemployment checks on?

I stopped in at my local employment office in Portland, Ore., to find out.

Holly Primiano: Rent, and my bills, basic necessities.

Chalene Macon: Rent, utilities, groceries.

Holly Primiano and Chalene Macon are an unemployed retail manager and teacher, respectively. They’ve each been getting a weekly unemployment check around $400 dollars, care of the federal government.

And most of the time, there’s nothing left over.

Chris Christopher: People who are receiving an unemployment check, if you give them a dollar they will spend that dollar and that will ripple through the economy quite a bit.

That’s economist Chris Christopher at IHS Global Insight. He says take away the $44 billion in federal unemployment checks next year, and it’s not just the long-term unemployed who’d feel the pain. It’s the places they tend to shop, too.

Ken Perkins is with Retail Metrics.

Ken Perkins: Dollar General, which is one of the major chains in the space, Family Dollar, 99-Cent Stores have all been expanding, so this is one of the few areas where there is significant growth.

Dollar General announced it’ll open more than 600 new stores next year. Perkins says that growth could slow significantly if federal unemployment benefits go away.

Back at the employment office in Portland, former retail manager Holly Primiano has been scrimping and saving.

Primiano: I’ve been trying to, if there’s any extra money, to put money aside for when unemployment runs off.

Six million Americans would run out of benefits next year if federal funding isn’t extended.

I’m Mitchell Hartman for Marketplace.

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