Impact of Losing Emergency Unemployment Compensation in Arizona

December 21, 2013

On Dec. 28, 2013, Emergency Unemployment Compensation (EUC) benefits terminated for 13,161 Arizona families.  Arizona’s unemployment average weekly benefit ranks as the third lowest in the country, and is about 70 percent of our neighboring states.  Nonetheless, the loss of $220 in average weekly compensation ($240 maximum) will in most cases place severe financial consequences on the long-term unemployed, leading to possibly loss of adequate housing, reliable transportation, and leading to a drawing down of savings—including often already inadequate retirement savings, or going into debt on top of the psychological burden unemployment places on people.

Studies indicate that the loss of unemployment benefits will not facilitate the movement of the long-term unemployed into jobs well, but rather a larger result will be growing numbers leaving the labor force, which will bring down the unemployment rate—but for the wrong reason.

As a consequence, the potential economic growth for the state will diminish, due to underutilized labor resources.