Jobless benefits reduced

Jobless benefits reduced

March 28th, 2012 by Dave Flessner in Business Around the Region


79 -- Maximum number of weeks for jobless benefits in Tennessee in April, down from 99 weeks

73 -- Maximum number of weeks for jobless benefits by Oct. 1

26 -- Maximum number of weeks for jobless benefits by January, 2013

$240 -- Average weekly benefit paid in Tennessee

$275 -- Maximum weekly jobless benefit in Tennessee

268,700 -- Number of unemployed Tennesseans

90,000 -- Number of unemployed Tennesseans receiving jobless benefits

Source: Tennessee Department of Labor and Workforce Development, National Employment Law Project

More than 10,000 unemployed Tennesseans will lose their extended jobless benefits next month because of the state's improving economy.

At the same time, another 46,000 Tennesseans who have been out of work for more than six months soon will have to begin documenting at least two job searches every week to continue getting benefits.

The changes stem from both the state's improving economy, which recently cut Tennessee's unemployment rate below the U.S. average, and congressional changes in the federal unemployment insurance program, which during the recession grew to a record high 99 weeks of benefits for some long-term unemployed people.

"Claimants who have been unemployed the longest are the ones affected by this change," Tennessee Labor Commissioner Karla Davis said in an announcement of cuts Tuesday. "As Tennessee's employment opportunities improve, other federal benefits could be reduced as well."

The Tennessee Department of Labor and Workforce Development is sending letters this week to more than 10,000 people who are in the last 20 weeks of the 99 weeks of extended unemployment benefits. The notices indicate that their last benefit payment will be made in the week of April 12.

According to National Employment Law Project, extended jobless benefits will end in two to three weeks for recipients in Kansas, Kentucky, Massachusetts, Missouri, Ohio, Oregon, South Carolina, Tennessee and Wisconsin. Extended benefits also are expected to expire the week of April 21 in Alabama, Delaware, Georgia, Maryland and Washington.

The cut in the extended benefits comes as Tennessee's jobless rate falls below the U.S. average and unemployment continues to decline in other states.

In February, Tennessee's unemployment rate of 8 percent was below the 8.3 percent jobless rate nationwide. In Georgia, unemployment fell last month for the seventh consecutive month, to 9.2 percent, down from 9.9 percent a year ago.

In February, Congress also adopted legislation to cut the maximum number of weeks for jobless benefits in all states to no more than 73 weeks by Oct. 1 and to require that any person unemployed for more than six months regularly document their job searches.

Jeff Hentschel, a spokesman for the Tennessee Department of Labor and Workforce Development, said department employees will have to meet personally with more jobless claimants and regularly audit job searches by those receiving extended unemployment benefits.

The cut in jobless benefits and the requirement for increased documentation of job searches was part of the congressional budget agreement last month to extend the payroll tax cut and continue federal jobless benefits, at least through the end of calendar 2012.

Unless Congress acts this year, all federal extended benefits for those unemployed longer than six months will end as of Dec. 31.

George Wentworth, senior staff attorney for the National Employment Law Project, said federally paid benefits after six months are being cut for both economic and budget reasons.

"Reducing the length of benefits does provide extra motivation for some individuals to find some type of a job, but right now there are still about four times as many unemployed people as there are available jobs," Wentworth said.

Currently, about 42 percent of all unemployed persons getting benefits, or 5.4 million Americans, have been jobless for more than six months.

"The vast majority of people who are unemployed are looking hard for work and need the income [from unemployment insurance] just to survive and have the resources to conduct a job search," Wentworth said.

Prior to the current recession, the biggest share of unemployed persons out of work for more than six months was in the 1983 recession at 26 percent.