News Column

350,000 Californians Face Loss of Extended Jobless Benefits

Dec. 3, 2012

Claudia Buck

Four more weeks. For thousands of out-of-work Californians, that could be all that's left of federal unemployment benefits.

Like so many issues teetering on the edge of the "fiscal cliff," unless Congress acts, the extra federal aid -- which at one point stretched unemployment pay up to 99 weeks in California -- will end on Dec. 29.

Letters from the state Employment Development Department have already gone out to nearly 350,000 California recipients of federal unemployment benefits, alerting them to the potential halt to their payments.

Overall, an estimated 2 million jobless Americans could be affected.

"It's a rude awakening," said Antwaun Billoups, a supervisor at the OneStop Career Center and EDD office on 50th Street in Sacramento.

"If Congress doesn't step in, it's going to be pretty bad," said Billoups, who sees 200 to 300 people a day come through the career center's doors for various types of job assistance. "A lot of people depend on help while working to find a job."

They include the long-term jobless like Samuel Borba, an unemployed beekeeper, who's been collecting $308 every two weeks in federal benefits -- "not even half of what I was earning" while working.

He's had some part-time warehousing and landscaping jobs, but has found nothing permanent since being laid off in November 2011. "I'd much rather work ... but there's no jobs," the 48-year-old said, standing in the career center lobby with his girlfriend.

Facing the imminent loss of his benefits, Borba lamented the timing: "Why do this right before Christmas? Without it, we can't make it."

The EDD says 346,300 Californians are currently getting the extra payments, which kick in after people exhaust their 26 weeks of state-paid unemployment. By year's end, EDD expects nearly 400,000 will qualify for the extended federal benefits.

Since July 2008, those federal extensions, which have expired and been re-extended several times, have paid out $40 billion into the hands of the state's long-term jobless.

State and federal unemployment benefits are identical, anywhere from $40 to $450 a week, depending on a worker's recent quarterly wages. It's designed to help recipients pay the rent, buy the groceries and cover the bills while looking for work.

If that money flow suddenly stops, the impact on California's economy will undoubtedly be felt, said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto.

Like any spending cut, whether in health care or defense budgets, eliminating unemployment benefits "takes money out of people's pockets." In that sense, he said, it's no different than any of the other fiscal cliff issues facing Congress.

Except that eliminating unemployment benefits hits a vulnerable segment of the state's population, said Levy. "It's a particular kind of safety net program for this extraordinarily long recession that's not the fault of the unemployed."

Since the recession began, close to 900,000 Californians have run out of all available benefits, both state and federal.

"It'll be very hard if you're counting on that money," said Carlos Hernandez, who recently was laid off -- for a second time -- from his job as a concrete finisher on commercial construction projects.

The 50-year-old father of three, whose wife works as a janitor, said he was just starting his federal extended benefits last year when he got called back to his $25-an-hour job. He worked steadily until his company's workload started petering out. He was laid off two weeks ago.

"I'm ready to go back to work any time. Any time," he said. But without knowing how long that could take, the potential loss of extended benefits "would affect me a lot."

The December cutoff comes amid signs the California economy is slowly improving. With about 300,000 jobs added so far in 2012, the state's unemployment rate in October was 10.1 percent, its lowest in four years.

"It's encouraging and it's gaining momentum as we head to the end of the year," said EDD spokeswoman Loree Levy, pointing to new jobs in hospitality, health care, software development and business services.

As the unemployment rate started inching down, the duration of federal benefits has been ratcheted back. In May, they dropped to 53 weeks and in September to 47 weeks. That means an unemployed Californian can now collect 73 weeks of combined state and federal benefits.

Also, under the last round of extensions that started in March, the federal government tightened its requirements for those receiving unemployment. In addition to certifying that they are "actively seeking work" each week, individuals must register and post their resume on the state's CalJOBS website and must meet with a OneStop career counselor to assess their job skills.

In addition, they're required to contact three employers a week and keep a written record of those contacts. Those who don't risk losing their federal benefits.

If the federal payments stop, Billoups predicts it will ramp up visits to the Sacramento region's 11 career centers. Already, as word has gotten out among benefit recipients, "They're coming back with a purpose. We'll start seeing an influx of people who want job-seeking services."

Many, he said, aren't aware that the national network of OneStop Career centers offer free workshops on resumes, interview skills, computer training, even the basics of obtaining a Social Security card or valid work permit. Job hunters also have free access to a phone bank, fax machines and computers.

Meanwhile, the extended unemployment burden has put additional strain on the state budget, said EDD's Levy. In 2010, "in the heart of the recession, we paid out more than $22 billion in (combined federal and state) unemployment benefits. That's an unprecedented demand," she said.

Typically, in a non-recession year, the state's unemployment claims total roughly $5 billion to $6 billion.

Like about 20 other states hit hard by unemployment claims, EDD is now borrowing from the federal government to cover its regular 26-week unemployment benefits. For the last two Septembers, it's paid out about $300 million a year in interest payments on the $10 billion it has borrowed.

Given all the competing fiscal cliff dilemmas confronting Congress, no one is predicting what will happen with unemployment benefits.

"It's up to the president and Congress to decide if it's time for this temporary program to come to an end," said Levy. "We just have to make sure no one is caught by surprise."



Source: (c)2012 The Sacramento Bee (Sacramento, Calif.). Distributed by MCT Information Services.