Long-term unemployed lose jobless benefits

Long-term unemployed lose jobless benefits

December 29th, 2013 by Shelly Bradbury in Business Around the Region

Frequently asked questions

Q. Am I affected?

A. If you have been receiving unemployment benefits for more than 26 weeks, you are probably affected. Unemployed people who have been receiving aid from the federal government through the Emergency Unemployment Compensation program will no longer receive benefits.

Q. Why didn't Congress extend the program?

A. The EUC program was intended to be a stop-gap measure to pull unemployed Americans through the worst of the recession. Now that the economy has started to recover, some politicians believe its time to end the program. Other politicians say its too soon and ending the program will hurt unemployed workers.

Q. Where do I get more information?

A. In Tennessee, call the Tennessee Department of Labor and Workforce Development at 615-741-6642. In Georgia, call the Georgia Department of Labor's unemployment insurance customer service line at 404-232-3001.

Deanna Smith worked at Krystal's call center for nine years before she was laid off in January 2013. Since then, she's been sending out resumes and browsing job sites and going to interviews, but hasn't found work.

She's been relying on federal unemployment benefits to support herself and her two kids. But those benefits ended Saturday. She'll get her last check on Jan. 4.

"I'm going to have to withdraw money from my 401K," she said. "I have no other choice."

She's one of 18,000 Tennesseans and about 40,000 Georgians who will no longer receive a weekly unemployment check since the Emergency Unemployment Compensation (EUC) program ended Saturday. The federal program was established in 2008 to offer benefits to long-term unemployed workers who used up all the regular benefits available through their states' unemployment programs.

Congress did not vote to extend the temporary program before the holiday break, which means the federal government will no longer pick up the tab for unemployment benefits. State unemployment benefits will be unaffected, which means Tennesseans can still claim up to 26 weeks of unemployment, while Georgians can claim between 14 and 20 weeks of jobless benefits.

It's the very long-term unemployed, like Smith, who will be most affected. Smith started receiving federal EUC benefits after exhausting the 26 weeks of payments from the state. She's been living on between $240 and $275 a week for about the last year.

"One thing I have learned is that there is a lot you can do without," she said. "If you go out and eat, you can cut that. You have to make adjustments so you can make it last. You cook from scratch. It humbles you and brings you back to the basics."

While she's applied for all sorts of jobs, she hasn't found a job that can match her previous income and experience while also fitting with her kids' schedules.

"Either I have too much experience or I have too little experience," she said. "I think that's what it comes down to. If you were used to making $25 an hour and they want to hire you for $10, that's a big difference. They may think you're a good fit but not hire you because they're afraid you may find another job down the road and leave."

At the height of the recession, unemployed workers could stay on state and federal benefits for as long as a combined 99 weeks, or about two years. As the EUC program started to wind down, that dropped to an average of about 50 weeks total, said Linda Davis, unemployment insurance administrator with the Tennessee Department of Labor and Workforce Development.

She's been sending out notices and trying to make sure everyone affected by the end of the federal program is aware that the program is ending - for now. There's an outside chance Congress could come back into session and pass a bill to reinstate the EUC program and retroactively pay EUC benefits, she said.

"Since 2008, Congress has come back in and approved it after it officially ended a time or two," she said. "Congress could conceivably come back in after the first of the year and put forth a bill to extend the program."

Just to be on the safe side, Davis' department is asking all EUC recipients to continue to certify - that is, fill out the weekly paperwork required to receive benefits - so that if Congress does reinstate the program, recipients can receive benefits retroactively.

Davis emphasized that the 35,000 Tennesseans still on the state's 26 weeks of unemployment will not be affected by the end of the EUC program.

As a result of Congress's failure to renew federal jobless aid for the long-term unemployed in its budget agreement, the share of unemployed workers receiving jobless aid is expected to drop to a record low of just 26 percent of those out of work, according to an analysis by the National Employment Law Project, a liberal think tank that supports the extended jobless benefits.

"Congress has failed long-term unemployed workers and their families," said Christine Owens, executive director of the National Employment Law Project. "It's good that members of Congress found a way to extend relief for doctors from scheduled cuts in Medicare payment rates, but that they couldn't find time on the congressional calendar or in their consciences to maintain assistance for jobless workers who have been searching unsuccessfully for work for at least half a year, at a time when long-term unemployment rates are still near record highs, is unconscionable."

But critics of the extended jobless benefits contend that continuing to pay workers who can't find another job after six months acts as a disincentive for people to find new work.

Harvard University Economist Robert Barro said unemployment would be lower if unemployment benefits had not been extended.

"If people have different incentives to be searching and accepting jobs, it would make a big difference how many jobs would actually be filled," he said.

While economists debate the value of extended jobless benefits, Smith hopes to only use her 401K money for the first three months of 2014 and is keeping her fingers crossed that she'll be able to find a full-time job by then.

"It's a process," she said. "You go in on an interview and they may take a month before they call you back in for two or three more interviews. It could be a month or two months before you actually start working."

Contact staff writer Shelly Bradbury at 423-757-6525 or sbradbury@times freepress.com.