News Column

Jobless May Be in for a Shock

Nov. 16, 2012

Pallavi Agarwal, Highlands Today, Sebring, Fla.

Stephanie McRoy is afraid for the country's jobless should Congress not extend federal emergency unemployment compensation, which is due to expire at the end of this year, and once offered up to 53 weeks of benefits.

"I don't think that people should be able to be on unemployment for years, but the reality is that these 2 million (affected) people will no longer be able to pay rent, mortgages, power, buy food, etc," she wrote on Highlands Today's Facebook page.

"I fear the homeless rate will skyrocket by the middle of next year unless more companies start hiring, cut into their own pockets to help America get back to work and sacrifice themselves for the benefit of others," she added.

Americans heard the same fears echoed this time last year.

Then President Barack Obama and congressional Republicans signed a last-minute deal.

Whether they reach the same compromise again is up in the air.

But Florida's unemployment compensation, which kicks in before the federal assistance, may be lower next year for people who get laid off in 2013.

Maximum state benefits already have been cut from 26 to 23 weeks under a law state legislators passed last year, which links time of compensation to the unemployment rate.

James Miller, the state's Department of Economic Opportunity's deputy chief communications officer, explained in an email that the number of available weeks is calculated based on the state's average unemployment rate for the third quarter of the prior year.

For each half a percent decline in the third-quarter average, a week is cut from the maximum weeks available. If the third-quarter average drops to 5 percent or less the total number of weeks is capped at 12.

The jobless rate was 8.8 percent in July and August, and 8.7 in September.

While some media, such as the Palm Beach Post, report that the number of maximum weeks drops to 19, Miller said the official calculation of the three-month average unemployment rate for the quarter ending Sept. 30 has not been done.

Once that happens, the state will release the official number, he added.

George Wentworth, senior staff attorney for the National Employment Law Project, said Florida was the first state out of a handful to enact the sliding scale, and is 48th nationwide for the $231 in average weekly unemployment checks it dispenses.

At 16 percent, it also has the lowest percentage of unemployed in the country who get jobless benefits, he said.

Wentworth blamed changes put in place by Gov. Rick Scott's administration, which have made it "unnaturally difficult" for people to seek unemployment compensation and have triggered a complaint by the NELP and Florida Legal Services to the U.S. Department of Labor.

Under the new rules, people can only apply online and have to finish a 45-question "initial skills review" that assesses their math, reading and research skills before they get their first unemployment check.

Wentworth estimates that 57 percent of those who run out of state benefits have still not found work, and eventually join the ranks of the long-term unemployed.

For some of these folks, more bad news came in May.

Florida's March unemployment rate fell to 9 percent, and the state no longer qualifies for federal extended benefits of up to 20 weeks, which typically kick in after the four tiers of emergency unemployment are exhausted and people are still jobless.

Cutting benefits, both state and federal, is not just "cruel," it is also bad economics, Wentworth added.

"The economy is slowly improving and it is still not generating enough jobs," he said.

The checks the jobless receive are an important piece of the economic picture.

"They are putting the dollars right back into the economy," he said.

Miller said the assessment, which is not a test because there is no pass/fail element, is "simply a comprehensive way" for the department and the workforce boards to better serve out-of-work Floridians by being able to determine their skill set and what support they need with the skills and knowledge to land a job.

The state also increased the required number of weekly job searches to five (three in rural counties) to encourage claimants to reach out to as many employers as possible.

"Re-employment Assistance is meant to serve as a bridge between jobs for claimants, and these changes enhance their opportunity to find employment by initially determining their skill level and increasing the number of interactions with potential employers," he added in an email.

Historically, Florida has a low recipiency rate, he said, but the department added $3.4 billion to Florida's economy through the payment of benefits in the 2011-12 fiscal year.

The Florida Chamber of Commerce pushed for the state benefit reductions. The chamber's executive vice president, David Hart, told the Associated Press, the falling unemployment rate shows Florida is making the right policy moves to create jobs and bring the state out of recession.

The new law was sought by business interests, and supported by Scott, to reduce the cost of the compensation program and hold down taxes paid by employers to sustain it.

Those taxes have skyrocketed as jobless rates climbed in recent years. The state also borrowed from the federal government to keep the taxes from going even higher.

Hart told the Associated Press the best remedy would be creating more jobs by cutting taxes and business regulations rather than paying employment benefits.

Locally, the economy is improving but slowly, said the Heartland Workforce's director of information and technology Alan Grimes.

"We are seeing an increase in hiring," he said.

The increase is primarily seasonal, he said, with farmers readying for harvesting and retailers gearing up for the holidays and the snowbirds.

The hiring may be the same as last year but it is better than the previous years, he added.

While the jobless rate may be falling, Grimes pointed out to another statistic that he said is rarely quoted: the U 6 report issued by the Bureau of Labor Statistics.

The report calculates the unemployment rate, also taking into account people who have quit looking for jobs and would work if offered one.

The U6 report places the October unemployment rate at 14.6 percent, much higher than the traditional unemployment rate.

Distributed by MCT Information Services

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Source: (c) 2012 Highlands Today (Sebring, Fla.)

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