Tennessee: Benefits extended as unemployment grows

Nearly 50,000 Tennesseans and 140,000 Georgians whose unemployment benefits ran out in the past year could get some monetary relief in the weakening job market.

For the first time in six years, Congress is extending jobless benefits by up to 13 weeks to help the growing ranks of unemployed cope with lost wages.

The seasonally adjusted jobless rate in Tennessee and Georgia jumped in May to the highest level in both states in more than 15 years, and some economists expect unemployment to climb still higher in the second half of 2008.

“What we’re seeing is a growing number of unemployed persons exhausting their benefits because of the tough job market,” Georgia Labor Commissioner Michael L. Thurmond said. “The extended benefits help to stabilize family finances and are a boon to the general economy, because these benefits help pay for rent, groceries and other critical expenses.”

In Georgia, which last week raised its maximum weekly jobless benefit to $330, the extended benefits could provide up to $4,290 for some unemployed people in the next three months.

In Tennessee, where the maximum weekly jobless benefit was raised to $275 in 2001, the extended benefits could provide some unemployed people up to $3,575 over the next 13 weeks.

The extra benefits should prove helpful for many of the 445 workers idled last fall when Collins & Aikman Corp. shut down its automotive plant in Athens, Tenn. Leanna Coleman, who worked at the plant for 15 years, still is looking for other work.

“Unfortunately, there are a lot of folks who have yet to find other work or, if they have, are working for less money,” said Kenneth Coleman, Leanna’s husband.

In Chattanooga, Colundra Conners, 20, said she has been looking for a job for six months since she lost her last job as a housekeeper.

“I get up every day looking for work, but there are not a lot of jobs available right now,” she said Tuesday at the Southeast Tennessee Career Center in Chattanooga.

Since the 1970s, Congress routinely has extended unemployment benefits beyond the normal 26 weeks during economic downturns, when the jobless are more likely to struggle to find work. Federal lawmakers last did so in 2002.

James Neeley, Tennessee’s commissioner for labor and workforce development, said extending benefits helps stimulate the lagging economy by putting money in the hands of those likely to spend it quickly.

“This is important legislation to help individuals pay for gas and groceries and make ends meet while they continue to look for work,” he said.

Although unemployment is above the U.S. average in Georgia and Tennessee, the average period a person is unemployed is shorter. Georgia’s 11.4-week average for unemployment in May was the shortest in the nation, and Tennessee’s 13-week average still was 2.3 weeks shorter than the U.S. average, according to the U.S. Department of Labor.

Tennessee and Georgia also have adequately funded unemployment insurance trust funds, although officials in both states said they will have to review current tax rates and benefits later this year.

Don Ingram, employment security administrator for the Tennessee Department of Labor and Workforce Development, said the state’s $616 million in reserves “means we are in pretty good shape,” but rising unemployment threatens to deplete some of those reserves.

But Tennessee officials are confident they won’t repeat the problems of the early 1980s, when the unemployment fund went bankrupt after the state’s jobless rate rose to 12.2 percent in June 1982.

So far this year, Tennessee unemployment tax collections actually exceeded what was paid out, Mr. Ingram said.

“We’ll meet in August or September to evaluate the adequacy of our trust fund,” he said.

But the extended jobless benefits won’t affect the state fund. The benefits totally are paid by the federal government.