Published On: Thu, May 10th, 2012

400K to Lose Unemployment Insurance by Saturday

Abrupt Cuts by Congress Mean More Out-of-Work Americans Have No Jobless Aid

By: The National Employment Law Project

Long-term unemployed workers in a growing list of states are being abruptly cut from federal unemployment insurance, a new analysis from the National Employment Law Project shows. Due to reductions Congress enacted earlier this year, more than 400,000 workers in 27 states will have lost between 13 to 20 weeks of federal unemployment insurance under the Extended Benefits program by Saturday, May 12th. The cuts come even though long-term unemployment remains near record highs.

“A growing number of long-term unemployed workers are being left behind,” said Christine Owens, executive director of the National Employment Law Project. “The final 13 to 20 weeks of jobless insurance that workers in high-unemployment states have been relying on is now being stripped away as a casualty of the legislation Congress passed in February reauthorizing the federal unemployment programs. These cuts are coming faster than the economy is improving, which means more workers will have to survive without any jobless assistance and families will have less money to put back into the economy.”

The latest round of cuts that take effect in eight states this Saturday will affect more than 200,000 long-term unemployed workers and account for the biggest number of workers to be hit so far, as states like California, Illinois, Florida, Pennsylvania and Texas are all being phased out at the same time.  In California, nearly 100,000 workers are being cut from the extended benefits this week.

As the attached chart shows, from January to February, four states were cut from 13 to 20 weeks of unemployment insurance; on April 7th and April 21st, another 15 states were dropped off; on May 12th, eight more states will be dropped off. By the end of September, another seven states will drop off, which will eventually bring the total to 34 states facing reduced federal assistance to the long-term unemployed. In these high-unemployment states, the maximum amount of unemployment insurance available to jobless workers will be 79 weeks – and those weeks will decline further when additional federal cuts start to take effect.

Over 19 million workers have relied on some form of federal unemployment insurance since the recession began. Average unemployment is now 39 weeks, and 41 percent of the unemployed have been out of work for six months or more. Almost one-third have been unemployed for over a year.

“The Extended Benefits program is being phased out because state unemployment rates have stopped climbing, but unemployment is still exceedingly high in many places. Job openings are not taking the place of these cuts,” Owens said.

These figures do not account for the millions of workers who have already run out of all state and federal unemployment insurance, and still cannot find work.

In fact, the percentage of unemployed workers collecting some form of unemployment insurance is dropping dramatically. In 2010, approximately two in three jobless workers qualified for either state or federal unemployment benefits. Last year, that number fell to 54 percent. The ongoing expirations of the Extended Benefits program will soon push the percentage of unemployed receiving some form of unemployment benefit to less than one in two.

If the other major federal unemployment insurance program – Emergency Unemployment Compensation – is allowed to expire at the end of this year, only a quarter of jobless Americans will be receiving unemployment insurance.

“We can’t pull the rug out from under the unemployed before the economy is fixed – and with 8.1 percent unemployment, we still have a long way to go,” Owens said.

“Especially now that these cuts are taking a toll, lawmakers need to pursue aggressive strategies to put the long-term unemployed back to work. That means effective reemployment policies; more support for education, training, job creation and job placement services; and more investments to rebuild America’s infrastructure and create a 21st century economy founded on good jobs.”

The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers.  For more about NELP, visit www.nelp.org.

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