Long-term unemployed former California workers who aren’t among February’s 41,200 new hires announced on Friday are about to see their extended benefits slashed 10.7%, but not today as planned.
Around 400,000 people now receiving the benefits received a two-week reprieve from the state Employment Development Department (EDD) after the state determined it couldn’t figure out how to implement the cuts dictated by the federal government’s sequestration agreement. Four million people could be affected nationwide.
The extended benefits kick in after a recipient exhausts the initial 26 months of assistance. It is estimated that the sequestration cuts will cost state beneficiaries $280 million by October 1.
Sequester, an austerity program of unprecedented stupidity, was launched by Congress on March 1. It was agreed to by Democrats and Republicans as a way out of a stalemated deficit fight and indiscriminately hacks $85 billion in vital government funding and services.
The EDD is delaying the cuts for two weeks to figure out how to implement them. The longer states wait to make the cuts, the higher the rate cut must be to hit the targeted sequestration. Some states are considering abandonment of unemployment extensions because of the complexity of the change, but EDD says California won’t be among them.
EDD is also sustaining other funding cuts as a result of sequestration. The federal government is reducing the state’s funding for administration of Unemployment Insurance by $20 million over the next 15 months on top of previous significant whacks. Federal monies were also curtailed for local workforce investment boards ($15 million) that help with job training, and job search assistance ($3.3 million).
The extended deadline for sequestration cuts was announced on Friday when February’s jobless numbers were announced. California’s unemployment rate dipped from 9.8% to 9.6%. Some of that reduction is accounted for by long-term unemployed people who have officially left the workforce and are taken off the rolls. The nation’s unemployment rate dropped from 7.9% to 7.7% in January.