100,000 jobless facing unemployment benefit changes
Dayton Daily News - February 27, 2012
Thousands of Ohioans could see their extended unemployment benefits cut short as early as this spring as the federal government pares back the duration of benefits from an unprecedented 99 weeks.
Congress last week reauthorized extended benefits through the end of the year for millions of unemployed Americans, including about 100,000 in Ohio.
The federally funded benefits are paid in tiers after claimants exhaust their regular 26 weeks of state jobless benefits.
Extended benefits are also triggered by state unemployment rates, and Ohio’s unemployment rate has declined steadily during the past several months to 8.1 percent in December. If unemployment remains stable, by March the state will no longer be eligible for the final 20 weeks of extended benefits, affecting about 19,000 claimants, according to the state jobs department.
If the state’s three-month average unemployment rate drops below 8.5 percent at any time this year, another six weeks of extended benefits will be eliminated.
Officials will not know for certain when or to what extent extended benefits might be cut until they see the next state jobs report on Friday, but people currently receiving benefits shouldn’t panic, said Angela Terez, a spokeswoman for the Ohio Department of Job and Family Services.
“If you’re receiving benefits, people can still exhaust their current tier,” Terez said. “It’s just that the next tier may not be available to them.”
Some economists think cutting back extended benefits could actually help stabilize the economy and reduce the unemployment rate by eliminating what they view as a disincentive for unemployed workers to look for jobs.
“Like all government benefits, people get hooked on the candy,” said Ken Mayland, an economic forecaster and president of Clearview Economics in suburban Cleveland. “The research shows that people’s job searches correlate strongly with the length of their unemployment benefits. Statistically, there is a tendency for people to find jobs faster when their benefits run shorter.”
Still, with an estimated four applicants for every job opening in Ohio, prospects are limited for even the most strident job seeker. The frustrations of a tight labor market can be seen on the faces of the thousands of unemployed workers who pass through the Job Center in Dayton, said Heath MacAlpine, assistant director of Montgomery County Job and Family Services.
“Our experience at the Job Center has been that most people are looking hard for work,” MacAlpine said. “When we talk about the monetary incentive … the amount of money you make while you’re employed clearly beats the amount of money you’re going to receive on unemployment compensation.”
Both state and federal jobless benefits average less than $300 a week in Ohio.
“The unemployment system does not exactly pay one some significant amount, so to act as if some large substantial number of unemployed people are just sitting around getting benefits and not wanting to work is just a fantasy,” said Zach Schiller, research director at the Cleveland-based think tank Policy Matters Ohio.
Julie Collari of Kettering wholeheartedly agrees.
After three years of unemployment, she has exhausted all of her jobless benefits and still has not had any luck finding a full-time job. She works for a temporary employment agency and relies upon donations from family and friends to help put food on the table and pay her bills.
“I can’t say I didn’t depend on unemployment; of course I did,” said the 52-year-old former sales manager. “But I would have traded it for a regular paycheck in a heartbeat. It’s just hard to find a job, especially at my age.”
In addition to scaling back federal benefits, the new legislation also encourages states to require drug testing for claimants who normally work in industries that require regular drug testing. It also mandates that states pursue people who collect benefits fraudulently by lying about their employment status or by some other means.
Ohio officials say they already pursue fraudulent claims aggressively and haven’t had time to consider the drug-testing proposal.
Policy Matters’ Schiller said such measures may have a marginal benefit, but they also further stigmatize unemployed workers who already face discrimination for being unemployed.
Evidence of such bias can be seen in numerous help wanted ads that require applicants to be “currently employed,” and surveys show that the longer unemployed workers remain out of work the harder it is for them to get a job.
“What’s really, really notable and stark about this labor market is the extent to which so many unemployed are unemployed for a long time,” Schiller said. “That’s the reason, as much as anything, why we need these extended benefits.”