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- 05-10-2012, 01:08 PM #1
100k Californians to lose unemployment benefits Saturday, 7 other states
100k Californians to lose unemployment benefits Saturday
Written by Jonathan Horn
11:25 a.m., May 9, 2012
Updated 9:47 a.m. , May 10, 2012
About 93,000 Californians are scheduled to have their extended federal unemployment benefits cut off Saturday because the state is no longer eligible for the long-term aid.
A drop in the state’s unemployment rate to 11 percent — its lowest mark in three years — is triggering the cutoff.
That means the state is no longer eligible for the Federal-State Extended Duration Program, or FED-ED. The program, which began in March 2009, allowed unemployed persons to receive benefits for up to 99 weeks. The maximum without FED-ED is 79 weeks. Pre-recession, the unemployment payments lasted 26 weeks.
California’s unemployment rate declined last month despite slow job growth partly because more discouraged workers stopped searching for jobs and were no longer counted in the labor force.
“Whatever drop we have seen in the unemployment rate is not totally due to improvement in the economy; it’s partially due to the people that gave up looking,” said Professor Esmael Adibi, who directs Chapman University’s Anderson Center for Economic Research in Orange County.
Where to get jobs help
The San Diego Workforce Partnership is a public agency that funds job training programs that help adults develop skills and job-seeking abilities. It doesn’t directly place people in jobs, but offers search assistance and training. There is a list of the career center it funds that can be accessed online at workforce.org or by calling (619) 228-2900.
The state Economic Development Department also has online brochure for basic needs assistance at utsandiego.com/jobhelp
The state Employment Development Department sent out notices to those affected over the last few weeks.
Bill Feit, 63, of Oceanside, said he received his on Saturday. Feit said he’s been unemployed for 88 weeks after the end of a contract job that paid $33 per hour. He said he’s been applying for many jobs, including those at Home Depot and Costco, but still having no luck.
“I’ve applied for three to five jobs a week for two years. Now I don’t even get any calls anymore,” said Feit, who gets $450 a week in unemployment. “That thing about being long-term unemployed, it’s true. The gates are closed. That’s how I feel.”
As of April 16, there were 664,649 Californians who had used all of the 99 weeks of available unemployment benefits.
Here are some answers to questions about this change in unemployment benefits:
Q: Why did this happen?
A: It’s a bit technical. Essentially, the state’s unemployment rate has improved enough that we no longer meet a federal threshold that says jobs are scarce enough to warrant extended benefits.
“If that’s the criteria, I question it because we were in a really bad spot...the rate is still pretty high,” said Alan Gin, a professor of economics at the University of San Diego. “So that’s kind of a flaw I think in the system.”
Q: How does this affect San Diego?
A: The EDD couldn’t supply how many people in San Diego are currently in the midst of the 99-week unemployment extension. However, in March, the county had a preliminary jobless rate of 9.5 percent and 152,100 unemployed people. The EDD will release the April unemployment figures on May 18. Statewide, the EDD reports that 100,000 more Californians could lose out on the FED-ED benefit extension if the unemployment threshold remains.
Q: Are we the only state that this is happening to?
A: No. California is one of eight states that will lose FED-ED benefits on Saturday. Colorado, Connecticut, Florida, Illinois, North Carolina, Pennsylvania and Texas are also being dropped. Fifteen other states lost the extension in April.
Q: Can we ever get these benefits back?
A: Yes, but not for at least three months. The FED-ED can be reinstated if California’s unemployment rate passes the threshold. That said, those who began receiving the extended benefit prior to May 6, like Feit, of Oceanside, would not be eligible to receive them again, says the EDD. Some who file for a certain extension through May 20 can reach 89 weeks of benefits.
Q: Is this really the time for the cut to be triggered?
A: There are two sides to the issue. On one hand, job growth in the state is slow, opportunities are limited and people need assistance to live, experts say. However, unemployment insurance is not meant to be a longtime benefit, said Kelly Cunningham, an economist at the National University System Institute for Policy Research.
“The unemployment benefit isn’t really intended to be something you live on. It sort of helps you through a short time period. It’s been extraordinary to extend it to 99 weeks,” he said. “Studies have shown that when you have these unemployment benefits, it does encourage or allow people to pass up job opportunities they could take but they pass them up because they are still looking for a higher paying job ... At some point unfortunately after 99 weeks it’s time to maybe go to other things.”
Q: Eventually, do all the extension benefits run out? What happens?
A: Yes, the federal government added several extensions over the standard 26 weeks of unemployment insurance after the recession started. The four other tiers of extensions have to be claimed by Dec. 23, 2012, or they expire. However, that could change if Congress and the president enact legislation to extend the benefits. In September, the maximum number of weeks on unemployment drops to 73 weeks.
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