Unemployment Benefits Lapse Severs Lifeline for Longtime Jobless

Photographer: Andrew Harrer/Bloomberg

While the national unemployment rate fell in November to 7 percent, after reaching as high as 10 percent in 2009, finding work is still a struggle for many. Close

While the national unemployment rate fell in November to 7 percent, after reaching as... Read More

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Photographer: Andrew Harrer/Bloomberg

While the national unemployment rate fell in November to 7 percent, after reaching as high as 10 percent in 2009, finding work is still a struggle for many.

Laura Walker, a 63-year-old paralegal, has been looking for work since January, when she was laid off from a California law firm. Until today, she could count on $450 a week in federal unemployment benefits for help.

Now, those checks will disappear, just as they will for 1.3 million other Americans whose emergency aid ran out Dec. 28.

“Not all of us have savings and a lot of us have to take care of family because of what happened in the economy,” said Walker, of Santa Clarita, who said she has applied for at least three jobs a week and shares an apartment with her unemployed son, his wife and two children. “It’s going to put my family and me out on the streets.”

The program, started during the recession, was intended to help jobless people after they exhausted state benefits, typically lasting six months. House Republicans resisted continuing the benefits without budget cuts elsewhere to cover the cost. Keeping it running another year would cost $25 billion and spur the economy enough to create about 200,000 jobs, the Congressional Budget Office estimated.

“It lacks compassion for the victims of the recession and, economically, it’s shooting ourselves in the foot,” said Lawrence Mishel, the president of the Economic Policy Institute in Washington, which backs policies that help low-income workers. “The timing is very premature. The evidence is that people who want work can’t find it.”

Still Struggle

While the national unemployment rate fell in November to 7 percent, after reaching as high as 10 percent in 2009, finding work is still a struggle for many. More than one-third of the unemployed, or 4 million people, had been out of work for more than 27 weeks as of last month, according to the U.S. Labor Department. Most states provide 26 weeks of unemployment benefits.

The additional federal benefits were put in place in 2008, under President George W. Bush. At its most generous, in 2012, the program allowed the jobless to collect unemployment checks for as many as 99 weeks, including state benefits, according to the White House. It had since been scaled back to a maximum of 73 weeks in states with the highest unemployment.

Opponents say the extended benefits discourage the unemployed from accepting jobs and that the program should be curtailed, given the recovery in the nation’s labor market.

‘Make Compromises’

“The economy has now been out of a recession for more than four years,” said Chris Edwards, an economist with the Cato Institute in Washington, which argues for scaling back the role of government. “These unemployment benefits are emergency benefits, but the economy is no longer in an emergency situation. People can find jobs if they are willing to moderate their wage demands and make compromises.”

Lisa Cicchinelli disagrees. The 46-year-old from a suburb of Albany, New York, said she’s been looking for work -- any work -- since June, when she lost her job as an administrative assistant in a doctor’s office.

“I’m tired of hearing the stigma of being on unemployment that people are lazy and milking the system,” Cicchinelli said in an interview. “I never lost a job in my life. I’ve been working since I was 15 and this is the first time I had to collect anything. I am hustling and networking and going places. You can’t just sit and wait for it to come to you.”

She and her husband, a state employee, have already used up all their savings. This week is the last that she can collect New York state unemployment benefits.

“It was difficult enough being on unemployment,” Cicchinelli said. “Now going to nothing is extremely difficult and extremely frightening.”

Jobs Gap

There were 3.9 million job openings across the U.S. at the end of October, according to the Labor Department. That same month, 11.3 million people were looking for work but couldn’t find it, a gap advocates say underscores the need to keep benefits flowing.

Some lawmakers are pushing to reinstate the benefits. Senate Majority Leader Harry Reid, a Democrat from Nevada, where the unemployment rate is 9 percent, said it would be the first issue taken up when Congress reconvenes next month. Senators Jack Reed, a Rhode Island Democrat, and Dean Heller, a Nevada Republican, are seeking to renew it for three months while Congress figures out a way to cover the cost.

Failure to extend the program will affect 1.9 million people who are forecast to use up their state benefits in the first half of 2014 before they can find work, according to the White House.

Largest States

The effect will be especially pronounced in the most-populous U.S. states. In New York, 102,700 people were expected to lose their benefits on Dec. 28, said Chris White, a spokesman for the state’s labor department. In New Jersey, about 90,300 will do the same, according to estimates from Democrats on the House Ways and Means Committee. More than 222,000 Californians will likewise see their benefits disappear.

The loss has consequences for Cindy Snow, a former social worker whose job was eliminated in April when San Bernardino, California’s school system terminated the child-care program where she worked.

Her husband, employed in the construction industry, has been without a job since 2009. They have been relying on assistance from the California Housing Finance Agency to cover a $1,424-a-month payment on their home in Beaumont, about 90 miles east of Los Angeles. When she loses her unemployment benefits, she said, the family will no longer qualify for the housing assistance.

‘Playing Games’

“Why are they using us as pawns?” Snow said, referring to politicians in Washington. “They’re playing games with people’s lives.”

Laura Walker, the paralegal, said she decided to take Social Security retirement early. The $1,574-a-month is enough to cover the rent on her two-bedroom apartment. Still, without her unemployment check, there won’t be money for anything else until she -- or someone else in her family -- finds work.

“I understand the government doesn’t want to pay for people who are taking advantage of it,” she said. “But I am not, and many other people are not.”

“I just don’t know what to do, except pray.”

To contact the reporters on this story: William Selway in Washington at wselway@bloomberg.net; Freeman Klopott in Albany at fklopott@bloomberg.net; James Nash in Los Angeles at jnash24@bloomberg.net

To contact the editor responsible for this story: William Glasgall at wglasgall@bloomberg.net

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