The Building Tradesman Newspaper

Friday, August 17, 2012

Economy is weak, but not weak enough to keep jobless benefits

By The Building Tradesman

The U.S. unemployment rate is relatively high, but it’s not high enough for continuing extended federal jobless benefits.

Effective Aug. 10, no state provides additional weeks of emergency federal unemployment insurance (UI) payments through the Extended Benefits (EB) program, as federal UI benefits continue to wind down. So says an analysis by the Center on Budget and Policy Priorities, which issued a report on 32 “high unemployment” states, like Michigan, whose jobless workers are losing Unemployment Insurance benefits.

In Michigan, the report said, 28,700 workers were already cut off from the extended benefits program in February. Of course, Michigan was one of the hardest-hit states when the economy went in the tank, so workers accessed those benefits earlier. Most other states’ jobless are seeing their federal benefits cut off this summer. A total of 512,000 long-term jobless workers among those 32 high unemployment states will lose benefits by this month.

Michigan’s 8.6 percent jobless rate recently moved us out of the top 10 among states in unemployment (we’re No. 39). All over the country, the still-high but slightly improving jobless numbers will kick everyone off of federal extended benefits.

Extended benefits, says Chad Stone of the Center on Budget and Policy Priorities, “will no longer be available in any state, not because most states’ economies have improved to anywhere near pre-recession conditions, but because they have not significantly deteriorated in the past three years.”

It marks the end of a program that provided up to 20 additional weeks of jobless benefits – in addition to the states’ usual 26 weeks –available under the federal Emergency Unemployment Compensation (EUC). It was part of legislation passed in February to keep the EUC alive through 2012.

That bill reduced the number of weeks of available to jobless workers and also changed the formulas that would trigger extra federal jobless benefits, in effect, cutting benefits even further by setting higher thresholds for unemployment pain.

The cuts, a recent report in USA Today notes, “are nudging some Americans into poverty, straining social services just as states and localities face their own budget woes and further crimping weak economic growth as those who lose benefits spend less.”

The average unemployed American has been out of work 40 weeks, according to the Labor Department, and there are still about three jobless people for every job opening.

If Congress doesn’t act when it returns after August recess, the AFL-CIO says, “the situation for long-term jobless workers will grow even more dire because the entire federal EUC expires at the end of the year, leaving workers only state benefits upon which to rely.”

Legislation to keep the EUC operating is expected. “But with the Republican lawmakers’ track record of blocking, filibustering and other delaying tactics in previous attempts to extend the federal unemployment insurance benefits, the outlook is uncertain,” the AFL-CIO says.

The National Employment Law Project’s George Wentworth told USA Today: “There’s going to be lots of people without any income still unable to find a job. You’re going to see these people not be able to feed their families and not able to pay their mortgages. It will have a devastating impact on a lot of local economies.”