Unemployed to Lose Extended Benefits Because the State Economy Is Doing So Well

Monday, July 29, 2013

Congratulations, California.

In recognition of declining state unemployment numbers, the federal government is eliminated the fourth tier of extended benefits for those out of work for more than 63 weeks. Consider this an update of “A Triple Dose of Bad News for Unemployed Workers,” published here two months ago.

The feds cut off money for the additional 10 weeks when the state’s three-month average of unemployment dipped below 9%. The state’s Employment Development Department (EDD) said 100,000 Californians who are already on the third tier of federal benefits will be the first to feel the pain.  

The state covers the first 26 weeks of unemployment before three federal extensions kick in. After the economy collapsed in 2007, unemployment benefits in California stretched across 99 weeks. Since then, more than 1 million people have fallen off the rolls, although that does not mean they are necessarily employed or earning enough to feed themselves.

The “good news” that California’s unemployment rate reached 8.5% in June, down from a high of 12.4% in March 2010, is a tad misleading. Employers’ payrolls did, indeed, grow by 32,000 workers, but they were led by the low-paying, leisure and hospitality industry (9,700 jobs) that specializes in part-time hires. The trade, transportation and utilities sector, which includes the equally low-paying wholesale and retail industries, also showed an increase.

The high-paying professional and business service sector, which includes lawyers and architects, declined.     

Those former workers still on the rolls, or just joining, have seen a big hit recently in the size of their benefits thanks to Congress. As of April 28, sequestration has reduced the amount of federal extensions by 17.69%. Sequestration was enacted by a Congress that felt it required the incentive of calamitous budget cuts to reach a more sensible accord on its own. So it scheduled the indiscriminate whacking of domestic and military spending with little regard for need, and then gave up on the negotiations.  

Budget cuts by the federal government have forced EDD to lay off 900 workers and slash telephone service hours dramatically.

More than 750,000 people in the state are still collecting unemployment benefits.

–Ken Broder  


To Learn More:

New Developments on Federal Unemployment Extensions and Benefit Cuts (California Employment Development Department)

California Loses Last Tier of Federal Jobless Benefits (by Christopher Arns, Sacramento Business Journal)

A Triple Dose of Bad News for Unemployed Workers (by Ken Broder, AllGov California)

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