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    Long-term jobless see reduction in benefits

    May 17, 2011

    Peter Gordon has been out of work for more than a year, and his $233-a-week unemployment checks stopped last month.

    "I'm getting by," he says, "but just barely."

    Gordon, 53, of St. Louis, worked in call centers and as a patient coordinator at a hearing clinic before being laid off. Last month, Missouri became the first state to quit the federal program that provides an additional 20 weeks of extended benefits for people such as Gordon: the long-term unemployed who have exhausted their otherwise-maximum 79 weeks of benefits.

    Missouri's Legislature reversed itself after a group of Republican lawmakers upset with federal spending backed off a fillibuster aimed at forcing cuts in benefits. That means thousands of people, including Gordon, will be eligible after all to receive an unemployment check for 20 more weeks.

    "I will be OK for another 20 weeks," Gordon says, "but I'm going crazy."

    In his state and elsewhere, benefits for the jobless are under pressure. Governors and legislatures across the nation are moving to cut the length of time unemployed workers can receive benefits, despite historically high unemployment rates, amid concerns that states may need to boost taxes on employers to shore up unemployment trust funds exhausted by the jobless benefits.

    More than 8 million Americans are drawing unemployment, according to the Department of Labor. Benefit levels are set and administered by each state and vary widely. The initial benefits, generally for 26 weeks, are paid by states, largely from employer taxes. It's a program that has helped tide over those who lost their job through no fault of their own since it was created in 1935 as a response to the Great Depression. In times of high unemployment such as this one, the U.S. government has enacted a series of additional emergency programs and extensions providing additional weeks of benefits, up to 99 weeks in some states with the highest jobless rates, paid with federal dollars.

    In late March, Michigan became the first state to reduce the basic 26 weeks of state-paid unemployment benefits to 20 weeks for workers who become unemployed starting next year.

    Missouri, while resuming the extended benefits, followed Michigan's lead and cut back the initial state-paid benefits to 20 weeks for the newly unemployed, starting immediately.

    In Florida, where the unemployment rate is 11.1%, the Republican-dominated legislature last week passed a law cutting maximum state benefits from 26 weeks to 23 weeks, with fewer weeks available when the jobless rate falls below 10.5%.

    Florida could provide as little as 12 weeks of checks to the jobless if unemployment falls to 5%. More than 1 million people are officially unemployed in Florida, according to the U.S. Department of Labor.

    The additional 20 weeks of extended federal benefits has ended in North Carolina, Tennessee and Wisconsin without those states' legislatures taking action required to remain in the program.

    In North Carolina, the legislature approved a technical change intended to keep the checks flowing, but packaged it with spending cuts that drew a veto by Democratic Gov. Bev Perdue. Arkansas and Illinois are among states that have cut benefits or are considering doing so this spring.

    'A very, very deep hole'

    The reductions come as the nation's unemployment rate remains stubbornly high despite other signs of economic recovery. The national jobless rate was 9% in April, down from a 10.1% peak in October 2009 but still well above the 4.9% rate of April 2008.

    Federal Reserve Chairman Ben Bernanke recently acknowledged the pain of long-term unemployment, even as he said inflation worries are a bigger concern for the Fed.
    "We are digging ourselves out of a very, very deep hole," Bernanke said. "We are still something like 7 million-plus jobs below where we were before the crisis."

    Forty-five percent of all unemployed people have been jobless for six months or longer, he said. Long-term unemployment is "the worst it's been in the post-war period," he said.

    "We know the consequences of that can be very distressing, because people who are out of work for a long time, their skills tend to atrophy. They lose contacts with the labor market, with other people working, the networks that they have built up," Bernanke said.

    Recession and high unemployment have strained the ability of states to pay their share of unemployment benefits, which are outpacing unemployment tax collections from employers.

    Michigan, where the unemployment rate has been in double digits since late 2008, owes the federal government nearly $4 billion that it borrowed to pay benefits.
    Gov. Rick Snyder, a Republican, noted that "we have people suffering today" when he signed legislation shortening the length of benefits for next year.

    Business groups, including state chambers of commerce, have led the push for reduced benefits to ease the taxes employers pay to fund them.

    The Michigan Chamber of Commerce, which pushed for the six-week cut in initial benefits, said in a statement that the move will save the state $300 million "and put Michigan's employer-financed (unemployment insurance) program on the road to long-term solvency."

    "Let's focus on bringing our unemployment rate down so we don't have people on unemployment," Snyder said.

    The Florida Chamber of Commerce said cutting benefits has prevented a $400 million increase in unemployment taxes on businesses that was scheduled to take effect because of the program's high costs in the recession.

    "Florida has been burdened with double-digit unemployment rates for nearly two years, and the existing system of unemployment compensation was never designed for sustained high levels of jobless workers," the Florida Chamber of Commerce said in a statement.

    The state moves are dismaying to Gordon and other long-term unemployed people. They say jobs remain hard to come by, particularly for mature workers. Many don't know how they will cope when the unemployment checks stop coming.

    "This is horrible. It's embarrassing and humiliating," says Susan Harrell of Akron, Ohio.

    Harrell, 58, has been jobless for more than two years and exhausted the full 99 weeks of state and federal unemployment benefits available to her, putting her in the unhappy category dubbed "99ers" by the jobless themselves. There are no programs for people like her who have used up all available benefits.

    In 25 states with the highest jobless rates and the most state funding, the jobless can get a maximum of 99 weeks of unemployment benefits, including a final 20-week federal extension that was part of the stimulus legislation. Other states have lower maximums.

    After earning as much as $60,000 a year, Harrell was laid off from her telecommunications job in 2005 and then, in April 2009, from a part-time bookkeeping job. She says she has gone through her savings and 401(k) retirement plan. She's lost her home, her car and health insurance, and filed for bankruptcy. That was while drawing a $260-a-week unemployment check; now that is gone as well. She recently signed up for food stamps.

    Harrell sees signs the job outlook improving, particularly for low-paying jobs. However, she says few people seem interested in hiring someone her age, despite legal prohibitions on age discrimination.

    "They look at me and say, 'How long are you really going to work?' That's about as close as you can get" to age discrimination, she says.

    She says benefit reductions are "like kicking people when they're down."

    "It's enough to make you furious," she says. "We're already down, we're already failing, and you want to take more away? Just to give it to who — the rich?"

    Tech worker Melissa Barone, 42, of St. Clair Shores, Mich., a Detroit suburb, has been out of work for nearly two years. Her husband, Michael, was laid off from his tech job in 2008.

    They used up their savings, cashed in their 401(k)s, lost their home and truck, and moved into the basement of his mother's home with their teenage son.

    Without health insurance, they were faced with a $22,000 hospital bill after Michael had a bout of pneumonia in December. They got help from their church to pay heating bills and turned to food banks for meals.

    She has 13 weeks of unemployment left and has gone back to school to get a nursing degree. Her husband recently landed a job in information technology.

    "It's so much better now that he has a job," she says. However, she adds: "We have nothing. No retirement."

    'Hostility' to unemployed workers?

    It's unclear exactly how many people have seen their benefits run out while they are still jobless. The Department of Labor does not issue such an estimate.

    The largest state, California, estimates that 343,657 people in the state have exhausted all unemployment benefits, according to the Employment Development Department. That's almost 10 times as many as at the start of 2008, when the comparable figure was less than 37,000.

    The National Employment Law Project, which advocates for the unemployed, estimates that nearly 4 million workers have run out of all benefits. Maurice Emsellem, policy co-director of the group, says state reductions "pull the rug out from under workers in a tough economy."

    "I've been doing this work for over 20 years," Emsellem said. "I've never seen this kind of hostility, especially in the middle of a recession, to unemployed workers."

    Rick Sloan, executive director of www.UnionofUnemployed.com, a project of the International Association of Machinists and Aerospace Workers, estimates that 3 million to 6 million workers have exhausted available benefits and remain jobless. He calls the moves to reduce benefits during a time of high unemployment "the definition of insanity."

    Before cutting its unemployment benefits to 20 weeks, Michigan had provided 26 weeks of benefits since 1954.

    "Exhaustion of benefits," he said, "really triggers the kind of real personal family pain that we haven't seen in this country since the Great Depression."

    Filed/discharged/closed Chapter 7 in 2010!

    #2
    "This is horrible. It's embarrassing and humiliating," says Susan Harrell of Akron, Ohio.



    This person and others like her shouldn't feel embarrassed or humiliated. It's not like this is 1999 or 2006 with full employment.

    At this point I think those in this person's situation should realize that their country and govt have already forgotten about them, so they should create a barter system with others in this situation.

    As long as one has good useful skills there's always another that can use their talents and they can trade their services.

    There is no recovery and eventually a lot more of us will have to get used to this.
    The essence of freedom is the proper limitation of Government

    Comment


      #3
      the "lost" and forgotten...society of the 50 and over, and unemployed and basically just done, we are finished, no where to go nor hide...we will die with nothing...but maybe a vote?? and who is it that we should vote for to get help. i have spoke about this months ago, and it's going to get far worse for us.

      we will never get hired. all our past expereinces are a waste ...and if anyone suggests i go back for a 4th degree i'll puke.

      so, i guess we are off to see the wizard?
      8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

      Comment

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