Thread: Unemployment Triples, Dozens of States Going Broke

Unemployment Triples, Dozens of States Going Broke

Friday, June 26, 2009 12:04 PM

NEW YORK/CHICAGO -- The government unemployment checks keeping Candy Czernicki afloat are fast running out and her prospects of getting a new job appear remote.

The lengthy recession has proved discouraging for the swelling ranks of unemployed Americans, and forced U.S. states obligated to pay them jobless benefits to pile debt on their already strained budgets.

Fifteen states have depleted their unemployment insurance funds so far, forcing them to borrow from the U.S. Treasury. A record 30 of the country's 50 states are expected to have to borrow up to $17 billion by next year, said Rick McHugh of the National Employment Law Project, a nonpartisan advocacy group.

"We are setting the stage for big pressures for states to restrict eligibility and benefit levels," McHugh said. "Those type of restrictive actions undercut the (Depression-era program's) economic and social stability purposes."

The state-run unemployment insurance programs are normally financed with payroll taxes paid by employers on each worker. But the funds' tax revenues are falling at the same time as benefit demands are rising.

Nine million Americans are receiving jobless benefits, triple the number who got checks at the beginning of the year.

Experts predict the number of recipients will peak sometime this summer as long-term unemployed run out of benefits, which were recently extended and last for 59 weeks in most cases.

"I believe I have two months of benefits left," said Czernicki, 44, who was laid off from her Eau Claire, Wisconsin, newspaper editing job last year.

UNFORESEEN IMPACT

"I am living with my sister because, after eight months of unemployment, I couldn't be living on my own any more," she said. "I don't think my sister will throw me out. I know at least that I am not going to be homeless."

Jonathan Cohen was laid off by a New Jersey nonprofit a few months ago and is growing discouraged. Competition for available jobs is fierce and he fears his monthly unemployment insurance checks will stop before he lands a new position.

"Once unemployment runs out then I'm 100 percent drawing down on my savings," Cohen said. "I'm hoping that as the (federal) stimulus money gets through the pipelines you'll start to see more openings."

The majority of states that did not foresee the recession's devastating impact and failed to create an adequate cushion in their unemployment insurance funds may seek to raise payroll taxes, meeting resistance from employers, experts predicted.

"State unemployment taxes will have to go up, but unemployment will have to come down," said Andrew Stettner of the National Employment Law Project.

The financial stress on states is only part of a larger budget debacle most face.

Forty-six states have collective budget deficits totaling at least $130 billion, according to the Center on Budget and Policy Priorities, and lawmakers are having to make unpalatable choices between tax increases and spending cuts.

The $787 billion federal stimulus package offered the states $7 billion to expand who qualifies for unemployment benefits, and to extend the length of time benefits are paid to 59 weeks from 26. The package also permitted states to borrow interest-free through 2010 but the money must be repaid.

The last time so many states needed to borrow because of depleted unemployment insurance funds was in the 1980s.

"It's nothing new and it has been done before. So far ... not one unemployment check has bounced in this country and it just won't happen," said Diana Hinton Noel of the National Council of State Legislatures.

One difference is the current recession is broader and has spared few states. The economy shed more than 500,000 jobs in each of the first four months of the year and the U.S. jobless rate is expected to climb above 10 percent by year-end.

Michigan, which of all the states had the highest unemployment rate in May at 14.1 percent, has doubled borrowings for its unemployment insurance fund to more than $2 billion since the beginning of the year. California owes the federal treasury nearly $1.5 billion and New York owes more than $1.3 billion, up from $358 million in January.

A few years ago, Texas sold up to $500 million in municipal bonds to meet its unemployment insurance obligations.

Jobless benefits are typically about half the worker's last salary. European countries are more generous, paying 60 percent to 80 percent of a worker's lost wages for at least a year.

A recent U.S. survey by CareerBuilder.com, an online job search Website, concluded that 23 percent of jobless Americans rely on unemployment checks to get by.

The checks often supplement meager earnings from part-time or temporary jobs.

"I have been taking just about anything but I don't know if I am going to be steadily employed," said Harvey, 53, a

Milwaukee, Wisconsin, salesman who declined to give his last name. He was let go a year ago by a store selling recreational vehicles when customers stopped showing up.

"When you lose your job, your bills don't stop, they keep coming in. It's a tough market out there. I have lowered my standards, taken odd jobs. No one wants to pay you benefits or a decent wage," he said.

http://www.newsmax.com/headlines/unempl ... 29308.html

Jonathan Cohen was laid off by a New Jersey nonprofit a few months ago and is growing discouraged. Competition for available jobs is fierce and he fears his monthly unemployment insurance checks will stop before he lands a new position.

Hmm, what kind of non-profit did he work for? A lot of non-profits assist illegal aliens, now he is competing with them for a job!! Sounds like Karma to me.

Originally Posted by Bowman

Jonathan Cohen was laid off by a New Jersey nonprofit a few months ago and is growing discouraged. Competition for available jobs is fierce and he fears his monthly unemployment insurance checks will stop before he lands a new position.

Hmm, what kind of non-profit did he work for? A lot of non-profits assist illegal aliens, now he is competing with them for a job!! Sounds like Karma to me.

My first thoughts exactly Bowman, especially when I saw this gem:



"Once unemployment runs out then I'm 100 percent drawing down on my savings," Cohen said. "I'm hoping that as the (federal) stimulus money gets through the pipelines you'll start to see more openings."



It struck me that the only people who would be hoping for jobs through the stimulus, would be those "non profitteers" whose specialty is in assisting the special interests.

Aside from illegal aliens and other assorted foreign workers, who else would Mr. Community Organizer be interested in providing jobs for?

There are many non-profit organizations that do not help illegals.

Originally Posted by CitizenJustice

There are many non-profit organizations that do not help illegals.

Do you have a list perchance?

I know quite a few American citizens and legal residents who could use some help right about now. It would be nice to have some information to pass on to them.