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Floridians running out of unemployment benefits

Datriel Chisom's job search is approaching the three-year mark.

For months, he's been striking out at job fairs and interviews for warehouse and hotel jobs. His lifeline for most of that time: unemployment insurance benefits of $141 a week, which ran out almost two months ago.

The 34-year-old St. Petersburg resident worries about how he'll pay his share of a mortgage split among four people. "I just don't know," he said, shaking his head. "Bills are coming up so fast. What happens if I can't find something?"

It's a question thousands of jobless Floridians are asking themselves. Or will soon.

Already, more than 140,000 people statewide have fallen off the unemployment insurance rolls during this recession before landing a new job. Goldman Sachs has projected that nationwide the unemployed will soon start losing benefits at a pace of more than 400,000 a month.

Meanwhile, there's little appetite in Washington for extending benefits for a fifth time, which would push the maximum length of benefit payouts past 100 weeks. Not when the government is paying an estimated $200 billion in unemployment aid this year, six times higher than pre-recession levels. Not when the federal deficit is projected to hit $1.5 trillion next year.

Senate Finance Committee Chairman Max Baucus of Montana, whose panel oversees the benefits program, described the payout fatigue in a recent interview with Bloomberg Business News.

"You can't go on forever (receiving unemployment)," he said. "I think 99 weeks is sufficient."

Peak has passed

Florida has a record number of unemployed workers: about 1.14 million based on the latest monthly report, which also showed the state reaching a record unemployment level of 12.3 percent.

But Florida no longer has a record number receiving unemployment benefits. Barring another sudden surge of layoffs, that peak came three months ago when nearly 736,000 Floridians were receiving either regular unemployment insurance or one of the federal emergency extensions.

As the unemployment crisis worsened during the recession, the federal government had gradually approved four tiers of extended benefits for the still-jobless who had run out of the standard 26 weeks of benefits provided by the state. String all four tiers together and someone could be eligible for up to 99 weeks of benefits.

In Florida, most will never see those 99 weeks, whether or not they find a job.

The Florida Agency for Workforce Innovation, which oversees unemployment insurance disbursement, is imposing deadlines this month that will impact thousands of people who are about to run out of different benefit tiers. To receive unemployment checks from the Tier 1 benefit, a claim must be established by May 23. To get benefits under Tiers II, III or IV, a claim has to be established by May 30.

If another extended eligibility isn't passed by those dates, the number receiving unemployment assistance is expected to steadily fall off in coming weeks and months.

More deficit vs. help

There are two camps on the wisdom of extending benefits further.

Opponents question adding to the federal deficit. They point to signs that the economy is picking up steam, including Friday's report of the second straight month of job growth nationally.

Supporters of another extension, however, say the economic turnaround is happening too slowly for too many.

"It would be wrong to conclude these early signs of recovery are easing the burden on millions of jobless workers — or that the existing lifelines are sufficient for those who have been jobless for years rather than months," said Christine Owens, executive director of the National Employment Law Project, a worker advocacy group.

The number of long-term jobless has swelled to 6.7 million, or almost 46 percent of all unemployed nationwide.

Mark Vitner, a senior economist with Wells Fargo Securities who closely tracks the Florida market, said he's torn in talking about the extended benefits.

"On an individual basis it is always difficult to argue against extending unemployment benefits," Vitner wrote in an e-mail. "I have plenty of friends and relatives that have been unemployed for long periods of time (some for nearly two years), and unemployment insurance is the only way they can meet their financial obligations in the short term."

Putting on his academic hat, however, Vitner touts research that indicates extending benefits actually lengthens the period of time people remain unemployed. "So ending the extended unemployment benefits may actually reduce the unemployment rate," he said.

The trick, he said, is winding down the benefits gradually enough to let economic recovery strengthen and to avoid overwhelming debt-laden consumers even more.

One thing that's tough to dispute: Unemployment aid has taken a heavy financial toll.

Since the recession began in 2007, $141 billion in unemployment benefits have flowed from the federal government to strapped state governments.

Trust funds used to pay benefits have gone insolvent in 34 states including Florida, forcing those states to borrow a combined $40 billion in emergency federal loans.

Florida, which has borrowed $1.6 billion in federal funds so far, faces a day of reckoning when it will need to either cut back on unemployment benefits or eligibility, substantially raise unemployment taxes charged to businesses, or both.

Times staff writer Robert Trigaux contributed to this report. Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242.

Unemployment benefits in Florida

735,711 — Recipients receiving unemployment benefits during the peak week of Feb. 13, 2010

627,150 – Certified for unemployment benefits as of May 1.

141,711 – Have exhausted all regular unemployment benefits and emergency extended benefits as of April 30.

80,000 — Estimated number of Floridians that may be eligible for extended benefits under a bill passed by the Florida Legislature.

Source: Florida Agency for Workforce Innovation

The case for extended unemployment benefits:

• Some economists deem it one of the best ways to stimulate the economy. A U.S. Department of Labor study found that for every dollar paid in jobless benefits there is a $2.15 impact on the economy.

• Jobless workers not receiving benefits put added stresses on other parts of the social service network.

• The Great Recession is a deeper downturn than any since the Great Depression, and is suffering a particularly severe case of long-term unemployment. Unemployment levels are already at a record high in states like Florida, and widely projected to rise even higher.

The case against extended unemployment benefits:

• It can be a disincentive to taking a lower-paying job. Some employers have made offers that were rejected because applicants said they didn't want to lose unemployment benefits.

• The economy is showing signs of recovery, mitigating the need for longer-term benefits.

• Unemployment insurance is intended to get workers through a temporary lapse in work, not a multi-year payout.

– Jeff Harrington, Times staff writer

Unemployment benefits in Florida

735,711

Recipients receiving unemployment benefits during the peak week of Feb. 13, 2010.

627,150

Certified for unemployment benefits as of May 1.

141,711

Have exhausted all regular unemployment benefits and emergency extended benefits as of April 30.

80,000

Estimated number of Floridians that may be eligible for extended benefits under a bill passed by the Florida Legislature.

Source: Florida Agency for Workforce Innovation



The case for extended unemployment benefits:

• Some economists deem it one of the best ways to stimulate the economy. A U.S. Department of Labor study found that for every dollar paid in jobless benefits there is a $2.15 impact on the economy.

• Jobless workers not receiving benefits put added stresses on other parts of the social service network.

• The Great Recession is a deeper downturn than any since the Great Depression, and is suffering a particularly severe case of long-term unemployment. Unemployment levels are already at a record high in states like Florida, and widely projected to rise even higher.

The case against extended unemployment benefits:

• It can be a disincentive to taking a lower-paying job. Some employers have made offers that were rejected because applicants said they didn't want to lose unemployment benefits.

• The economy is showing signs of recovery, mitigating the need for longer-term benefits.

• Unemployment insurance is intended to get workers through a temporary lapse in work, not a multiyear payout.

Jeff Harrington,

Times staff writer

The case for extended unemployment benefits:

• Some economists deem it one of the best ways to stimulate the economy. A U.S. Department of Labor study found that for every dollar paid in jobless benefits there is a $2.15 impact on the economy.

• Jobless workers not receiving benefits put added stresses on other parts of the social service network.

• The Great Recession is a deeper downturn than any since the Great Depression, and is suffering a particularly severe case of long-term unemployment. Unemployment levels are already at a record high in states like Florida, and widely projected to rise even higher.

The case against extended unemployment benefits:

• It can be a disincentive to taking a lower-paying job. Some employers have made offers that were rejected because applicants said they didn't want to lose unemployment benefits.

• The economy is showing signs of recovery, mitigating the need for longer-term benefits.

• Unemployment insurance is intended to get workers through a temporary lapse in work, not a multi-year payout.

Jeff Harrington, Times staff awriter

Floridians running out of unemployment benefits 05/08/10 [Last modified: Friday, May 7, 2010 9:45pm]
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