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May
2012
30

1,000,000 People Prematurely Cut Off From Unemployment Benefits Following Rules Changes



Nearly three years after the “end” of the “Great Recession” those who have suffered through long-term unemployment are still feeling the effects. In the United States, nearly five million people have been out of work for over 6 months and due to poor policy many will soon be facing the reality of losing their benefits. New regulations have made it harder for states to qualify for maximum aid. In return, many states are forced to prematurely cut people off from these “safety net” programs:

Since then, the jobless in 23 states have lost up to five months’ worth of benefits.

Next month, an additional 70,000 people will lose benefits earlier than they presumed, bringing the number of people cut off prematurely this year to close to half a million, according to the National Employment Law Project. That estimate does not include people who simply exhausted the weeks of benefits they were entitled to.

Those who champion extensions say that the cuts are premature and will further the plight of those affected by long-term unemployment:

Chad Stone, the chief economist at the liberal Center on Budget and Policy Priorities, said Congress had never before put the brakes on extended benefits when the labor market was so weak. “It’s moving in the wrong direction, and it’s occurring at a time when unemployment is very high,” he said.

In some states, policy is making it harder for those who need help. One such state is Florida which, under Tea Party Governor Rick Scott, has become the nation’s stingiest in terms of unemployment aid. His changes have included mandatory online filing, lengthy tests, and detailed logs of job searches, all barriers to entry for those on the hunt. In some cases these barriers border on discrimination:

 In a formal complaint filed with the U.S. Labor Department, the National Employment Law Project and Florida Legal Services claimed the law shortchanges people who should be eligible for benefits.

“Florida’s revised procedures make it just about as difficult as possible for unemployed workers to access unemployment insurance now,” said Florida Legal Services attorney Valory Greenfield in a statement. “The effect is that the state is blocking workers from accessing help they are qualified for and twisting the knife in the state’s ailing economy. Nowhere in the country is it this hard to get help when you lose a job.”

Only 15 percent of applicants received state assistance in the fourth quarter of 2011. The national average for 2011 was 27 percent:

From August to April, 43,680 Floridians were denied benefits because they didn’t finish a 45-question test. Over the first three months of this year the rate of benefit denials for procedural reasons climbed 200 percent when compared with the year before. February was the first month when fewer than half of new applicants received benefits. Nationwide, more than 70 percent of new applicants received benefits.  

In North Carolina, lower unemployment taxes matched with expanded benefits in the 1990s have set up a situation in which the state is $2.8 billion in debt to the federal government because it had to borrow to pay out benefits.

“Things were really good. No one thought this bad day would ever come,” said Gary Salomido, vice president of government affairs for the state chamber of commerce. “For a long time, all of us just didn’t pay as close attention as we should have to making sure that, when things really get bad, the trust fund is there for them.”

The traditionally conservative Chamber of Commerce is now calling for cuts in unemployment to balance the deficit. These cuts include capping weekly checks at $350 and changing eligibility from 26 to 20 weeks. But many critics of the proposal, such as the AFL-CIO, point out that this unfairly punishes workers and not businesses:

“When the economy was flush and unemployment was low, businesses got a tax break,” said Mary McMillan, state director for the AFL-CIO. “Now, they want to rebuild the trust fund on the backs of the unemployed, which we think is unjust and shouldn’t happen.”

McMillan said a recession is no time to cut unemployment benefits.

“There’s one job for every three job seekers,” she said. “We feel like, in this tough labor market, we still need to provide support to these families who are struggling to pay bills and put food on the table.”

In California, the unemployment rate has dropped to 11 percent. For the chronically unemployed this means that emergency funding will end and 93,000 Californians will lose their benefits next week. An additional 100,000 people who would have been eligible for benefits will no longer be.

Some regions are still not recovering and remain in a dire situation. In agricultural Merced, CA, unemployment still hovers over 20 percent. Brenda Callahan–Johnson runs the Merced County Community Action Agency and will be looking to help those being cut off from the system they paid into:

“I think Merced County is used to hardships, but we are stretched beyond our capacity here,” Callahan-Johnson said of the rural county that sits roughly midway between Fresno and Sacramento. “In Merced County there are no jobs to be had.”
 
A state must have an unemployment rate 10 percent higher than the previous three years to qualify for emergency funding, according to Federal law. On May 12th, eight states lost their funding:

The others are Colorado, Connecticut, Florida, Illinois, North Carolina, Pennsylvania and Texas, where another 140,000 people will be affected. Fifteen other states were cut in April, including Michigan, Ohio, Indiana, Georgia and South Carolina.

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