News Column

Lower Unemployment Rate Equals Fewer State Benefits

Oct 22, 2012

Emily Roach

Unemployement

Florida ranks last in the nation for the rate of unemployed people receiving state benefits and in January its going to become even stingier.

The eligible weeks of unemployment insurance benefits will shrink to 19 from 23. September's unemployment rate of 8.7 percent released Friday sealed the deal. And worker advocates say the state has put other changes to the system in place that stymie eligible unemployed people from getting benefits.

This year, the state curbed eligible weeks to 23 from 26, but extended benefits from the federal government mean that those currently unemployed can get benefits up to 60 weeks. The federal extensions expire at the end of the year. So in 2013, someone who gets laid off faces the possibility of less than five months of unemployment benefits being available, instead of more than a year.

Last year, more than 30 percent of unemployed workers in the United States were out of work for more than a year, according to the Labor Department.

"You got kids, pay rent, wash clothes. ... It's really tough," said Jolette Jean-Louis of West Palm Beach, who has been unemployed for several months and was receiving $170 a week. "But when you have it, something is better than nothing."

Benefits' Name, Timeline Change

About 132,200 people were on state benefits in the second quarter of 2012, just 17 percent of the unemployed statewide, according to the Labor Department, a drop of 40,427 since the same quarter last year. Gov. Rick Scott has touted this as a positive sign in the labor market, but worker advocates said the system is weeding out people who qualify for and deserve the benefits while the employment situation has improved minimally.

James Miller, spokesman for the state Department of Economic Opportunity, pointed out that the unemployment rate has continued to decline under Scott.

"More and more Floridians are finding jobs, Florida has experienced positive annual job growth for 26 straight months, the number of job postings is up significantly over the year, the consumer confidence index is at a post-recession high, and Florida is expected to create more than 900,000 new jobs by 2018," he said in an email response. "All positive indicators that Florida's economy is on the right track."

However, nearly 58 percent of the unemployed exhaust their state unemployment insurance benefits without getting a job.

"They live on the absolute edge of survival," said Kate Watson, an attorney with the Legal Aid Society of Palm Beach County. "The idea of them cutting it even further in this economic landscape ... What do you say to people?"

Penalizing the unemployed "seems really extreme," said Emily Eisenhauer of Florida International University's Research Institute on Social & Economic Policy. Especially when groups such as older workers, black workers and Latino workers have much higher rates than the state average.

"If our benefits are doing what they are designed to do, which is providing a bridge and safety net for the unemployed as well as stimulus of the economy ... then they should correspond to the reality of our economy," Eisenhauer said.

Advocates of the system point out that unemployed people immediately spend their benefits on rent, food, gas and other necessary items, stimulating the economy. If those people do not have benefits, they will spend less and have to rely on other forms of government assistance.

Businesses, not workers, pay the insurance tax. This year employers will pay unemployment compensation tax on each employee of between $120.80 and $432. In Florida, the payment has been renamed reemployment assistance tax just as the benefits have been renamed reemployment assistance.

When the Department of Economic Opportunity announced the name change in July, Gov. Rick Scott said in the news release that transforming the program was "one of my top priorities for economic development and job creation." He also said employers would see $500 million in tax relief.

Complaint Filed About System

The reduction in weeks will group Florida with some other frugal states. Georgia is currently at 19 weeks based on it's unemployment rate, and Missouri, Michigan and South Carolina have all enacted 20-week maximums, said George Wentworth, senior staff attorney for the National Employment Law Project.

At a maximum of $275 a week, "Florida benefits themselves are already amongst the lowest in the country," Wentworth said.

The average weekly check was for $231 in the 12 months ending June 30, he said. That ranks the state 48th in the country. Also, the state benefit replaces 25 percent of wages, far below the 50 percent or better that most states replace.

Florida has traditionally been near the bottom of the rankings for state benefits, and a Republican-led House passed additional measures last year that made applying for and receiving benefits more technical and time-consuming.

The new system has doubled the number of people disqualified for benefits based on their job search information and tripled the number of people who are disqualified on reporting requirements.

Wentworth said that is depriving eligible people because of a "paperwork issue," though ironically, it's the fact that there's no paper involved that is creating much of the problems.

"It's driving tens of thousands of people who two years ago would have been recipients of benefits off the rolls," he said.

NELP and Florida Legal Services have jointly complained to the Labor Department about Florida's new unemployment compensation system. When lawmakers changed the number of weeks to a sliding scale based on unemployment rate, dropping to 12 weeks for a 5 percent rate, they also set in motion changes to the filing system.

The DEO as of August last year began requiring applicants to file electronically and to complete a skills test -- one that takes computer literate people 45 minutes to complete -- before they can receive benefits. The complaint outlines an electronic filing system that stymies eligible recipients in their efforts to get benefits.

The system is "harsh" on people who are desperate, said Valory Greenfield, a Florida Legal Services staff attorney.

"You're not talking about the good times rolling here," she said. "People are still having trouble getting jobs."

One of those people is Maria Cook of Wellington, who has been getting benefits since the beginning of September.

"It covers my bills" but not rent, said the single mother of two. She's applied for food stamps. Unemployment insurance changes

Denials of claims and initial claims dropped faster after the new electronic system went into effect in August 2011.

2012,Q2 2012,Q1 2011, Q4 2011,Q3 2011,Q2 2011,Q1

Total denials 79,046 86,627 89,973 79,151 54,771 51,981

Change 44.3 % 66.7% 64.4% 24.9% -11.6% -13.8%

from previous year

Initial 163,013 173,205 186,010 201,402 216,809 228,603

claims

Change -24.8% -24.2% -20.3% -15.7% -10.4% -8.7%



Distributed by MCT Information Services



Source: (c) 2012 The Palm Beach Post (West Palm Beach, Fla.)


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