Falling Unemployment Rate Has Dire Consequences For The Unemployed

by Lisa Swan on May 11, 2012

unemployment lineMay 12 is going to terrible day for 200,000 unemployed workers in eight states. That is because they will be kicked off the unemployment rolls, due to unemployment rates dropping. Ironically, such rates have dropped in no small part due to unemployed people giving up their job search in despair.

In California, the unemployment rate is still in double digits – 11 percent, to be exact. Yet federal law has not extended benefits in that state because the current unemployment rate must be at least 10% higher than it was over at least one year in the past three years. Confused yet? Imagine how the unemployed must feel!

CNN Money explains how it works. The federal government was offering 20 weeks of extended benefits, available after the unemployed have exhausted their state and federal unemployment benefits, which can total up to 79 weeks, making a total of 99 weeks of unemployment benefits. But the law is contingent upon the state’s unemployment rate continuing to rise. However, as some people have gotten jobs, while many of the unemployed have either retired, or thrown up their hands as given up, the unemployment rate has been falling in most states.

So far, because of this rule in the federal regulation, 25 states have already stopped offering the extended benefits. This month kicks many of the long-term unemployed off the rolls in eight states, including California, Colorado, Connecticut, Florida, Illinois, North Carolina, Pennsylvania and Texas. By the time September comes along, every single state but Alaska will be out of the extended benefits program. This, even though states like Nevada still have a 12% unemployment rate.

We are now heading to the end of the 99-week unemployment era, an amount caused by the Great Recession. Now a new federal law means that the maximum weeks that the unemployed can get money can be as small as 40 weeks, in states where the unemployed rates are under 6%, or as much as 73 weeks, in states where the unemployment is 9% or more.

However, there are still millions of the long-term unemployed – CNN Money says the number is 5.1 million (41 percent of the unemployed).  And, as much as some critics would like to think, ending unemployment assistance will not get these people back in the workplace, especially when we know that many employers discriminate against them. Instead, many of those jobless losing unemployment checks will end up on public assistance programs.

That is what is happening with California resident Tina Dumaguing. The Associated Press reports that the former school district employee just signed up for food stamps after using up her 99 weeks. She has been unable to find another job. “I’ve been applying anywhere I could. There are just no jobs out there,” Dumaguing told the AP.

You’d never know it from the critics who equate unemployment with welfare, but money from unemployment assistance actually does help the economy. The Congressional Budget Office says that for every $1 given out, it results in $1.90 in “economic growth,” the AP reports.

In California, the 912,000 unemployed Californians received $5 billion in unemployment assistance since 2009. “Imagine our economy without that additional $5 billion,” asks Loree Levy of California Employment Development Department. “It gives the individuals spending power in local communities.”

When is somebody going to do something to help the long-term unemployed? That’s what those in that situation have to be wondering these days.

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Lisa Swan is a Feature Writer for the Compliance Exchange and the Wall Street Job Report. She is also a columnist for The Faster Times and a blogger forSubway Squawkers. Her work has also appeared in the New York Daily News, Yahoo Sports, Huffington Post and the books Graphical Player 2011 and Graphical Player 2010.

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[...] Falling Unemployment Rate Has Dire Consequences For The Unemployed [...]

by The Longterm Unemployed Over 55 Face Desperate Times | The Wall Street Job Report on May 16, 2012 at 6:02 pm. Reply #

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