An emergency federal program that acts as a lifeline for 1.3 million jobless workers will end on Saturday, drastically curtailing government support for the long-term unemployed and setting the stage for a major political fight in the new year.

The program, in place since the recession started in 2008, provides up to 47 weeks of supplemental unemployment insurance payments to jobless people looking for work. Its expiration is expected to have far-reaching ramifications for the economy, cutting job growth by about 300,000 positions next year and pushing hundreds of thousands of households below the poverty line…

The loss of benefits is expected to drain billions in consumer spending from the economy next year. People losing their federal benefits — often benefits they expected to continue to receive for weeks or months into 2014 — described cutting back on Christmas, driving less, turning off the heat, draining retirement accounts, applying for food stamps, readying to move in with relatives and missing mortgage payments.

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The end of unemployment checks for more than a million people on Saturday is driving out-of-work Americans to consider selling cars, moving and taking minimum wage work after already slashing household budgets and pawning personal possessions to make ends meet…

Some unemployed people said the loss of benefits might drive them to take minimum wage jobs to get by until they can find work at their skill level and in their field.

Richard Mattos, 59, of Salem, Ore., has been out of work since March, when he was laid off as a case manager at a social services organization. Without the unemployment income, Mattos said he and his wife will have enough money for one month’s worth of bills. Almost every day, he visits employment centers run by the state of Oregon or Goodwill Industries International.

“I don’t know what we’re going to do,” he said. “We could end up homeless because of this.”

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“Even the four weeks without money would set me back. I don’t have any savings; I don’t have anyone I can borrow from. I’ve been on my own basically since I’m 18 and there isn’t anyone I can ask for money.

“Things are going to change drastically because, I hate to say it, but I’m going to have to go down to social services for food. It’s going to humble me. My son is hungry and I can’t feed him. I might lose my car. I’m not going to have a phone for people to contact me when I am looking for a job. It’s going to be hard. This is just hard. To not even be able to give your son anything when he’s hungry. We’re all scared, every one of us. Not just me.

“I keep a roof over our head. There’s food — maybe not steaks, but there’s food. [It’s] keeping our head just above the water, you know. We’re all about to drown. The 1.3 million of us are about to drown.”

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Hirshfield has lived a largely ideal life. After leaving the insurance industry (where he had worked for 20 years), he joined a Connecticut bank as a vice president, earned a six-figure salary and lived comfortably with his wife and children, one of whom he had sent to college. The job was relatively stable and professionally stimulating. At 54 years old, he was happy.

Then it fell apart. The bank went through one, two, three restructurings. The last one cost Hirshfield his job.

He began training for a new career, taking a 30-week course in project management at the University of New Haven in hopes of widening his allure to prospective employers. But the search for work has been impossibly tough. He has been unemployed now for 14 months. For just over a year, he has been receiving unemployment benefits…

Hirshfield says he’s more open now to blue collar work. But like Torian, he isn’t sure if his skill set would be appealing to such an employer and he stubbornly (he admits) wants to hold on to the life he built.

“You grow into a certain station in life, and you want to maintain that,” he said.

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The looming expiration of federal unemployment benefits for more than 1 million Americans is “simply immoral,” House Minority Leader Nancy Pelosi (D-Calif.) said Friday…

Meanwhile, Republicans contend that Democrats dropped the ball by not offering a specific plan to cover the costs of an extension before heading home for the holidays…

Senate Majority Leader Harry Reid (D-Nev.) said he plans to bring up an extension as his first order of business in 2014, but some Republicans have indicated they would only be willing to extend the program if the cost of another extension is offset elsewhere

Other GOP lawmakers have not said they would oppose an extension, but are concerned about the roughly $26 billion cost of extending the program for another year. Pelosi has said she does not believe that cost has to be offset, arguing the program does more good for the economy than it costs.

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Some opponents of continuing the program say the roughly $25 billion price tag would be more effective at rehabilitating the labor market if put toward creating jobs, rather than extending a safety net. Some analysts also describe the Emergency Unemployment Compensation program as a recession-era holdover no longer needed in an economy—and labor market—that has been recovering for more than four years.

“This is an emergency program,” said Chris Edwards, of the Cato Institute, a libertarian think tank in Washington. “The emergency has long been over.”

“It is to an individual’s advantage—as soon as they are unemployed—to really try to get employed again,” Mr. Edwards said. “The curious thing about emergency unemployment benefits is that [they] induce people to wait to start searching for a job and that ends up kind of hurting them.”…

“The problem we have right now is not a shortage of people who want jobs,” said Jesse Rothstein, a professor at the University of California, Berkeley. “The problem we have is a shortage of jobs and that doesn’t get better if you make people more desperate.”

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This is the argument that’s made: people have a disincentive to find jobs because of the unemployment insurance. End the insurance, give people the incentive to work. Kentucky Sen. Rand Paul called the insurance a “disservice” to workers. And in the wake of North Carolina’s move, unemployment did drop in the state. It was near 9.5 percent at the beginning of the year; now, it’s around 7.5 percent.

But there isn’t the direct line that people like Paul suggest. First of all, at least one study suggests that no significant disincentive actually exists. And as Business Insider reported earlier this month, yes, the unemployment rate in North Carolina dropped — but so did the size of the labor force. People in North Carolina stopped looking for jobs at a dramatic rate over the course of 2013. Since the unemployment rate is the number of unemployed divided by the size of the labor force, and since the labor force only includes people looking for jobs, the unemployment rate fell. The graph at right, via the Federal Reserve, shows the link between unemployment and labor force size in North Carolina. Blue is unemployment; red, labor force.

People in North Carolina did get new jobs, of course, but Business Insider, citing JP Morgan’s chief economist, explains that this is in part thanks to “unemployed folks taking jobs for lower pay than they were waiting for.” But, JP Morgan’s Michael Feroli said, “the participation effect may be more important.” You have to actively look for work to collect unemployment benefits, and without that push, it’s easy for the long-term unemployed to lose hope.

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Unemployment has reached multi-year lows in 27 states, a bit of positive news for state labor markets that are still struggling through a mild recovery.

In just over a third of states, there are more jobs now than there were when the recession began, according to an analysis of new Labor Department data by the Economic Policy Institute, a think tank focused on the needs of low- and middle-income workers. There may be more jobs in many states since the recession, but there are also more people

In 37 states, the share of jobs needed to return the local economy to pre-recession employment rates is at or above 5 percent, according to the analysis provided by Doug Hall, director of the Economic Analysis and Research Network at EPI.

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US employers advertised the most job openings in more than five years in October, and the number of people quitting also reached a five-year high…

[T]he number of workers who quit rose 2.5 percent to 2.39 million, the most since October 2008. More workers quitting can signal a healthy job market, because most of those people likely either have a new job or are confident they can find one…

The job market remains competitive, even though the competition is easing. There were 2.9 unemployed people, on average, for each available job in October. That’s down from a ratio of nearly 7 to 1 in July 2009. In a healthy economy, the ratio is typically 2 to 1.

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