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More Than 200,000 Americans Will Lose Their Unemployment Benefits This Weekend

By Pat Garofalo on May 11, 2012 at 9:35 am

"More Than 200,000 Americans Will Lose Their Unemployment Benefits This Weekend"

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According to a new report from the National Employment Law Project, 230,000 Americans will see their unemployment benefits vanish this weekend, even as the jobless rate remains stubbornly high. Nearly half of those losing their benefits live in California, where the unemployment rate is 11 percent:

Long-term unemployed workers in a growing list of states are being abruptly cut from federal unemployment insurance, a new analysis from the National Employment Law Project shows. Due to reductions Congress enacted earlier this year, more than 400,000 workers in 27 states will have lost between 13 to 20 weeks of federal unemployment insurance under the Extended Benefits program by Saturday, May 12th. The cuts come even though long-term unemployment remains near record highs. [...]

The latest round of cuts that take effect in eight states this Saturday will affect more than 200,000 long-term unemployed workers and account for the biggest number of workers to be hit so far, as states like California, Illinois, Florida, Pennsylvania and Texas are all being phased out at the same time. In California, nearly 100,000 workers are being cut from the extended benefits this week.

These cuts are occurring because the formula under which states receive federal funds for extended unemployment benefits stipulates that those funds disappear if the state’s unemployment rate stops increasing. So because California and other states have seen some improvement in their labor situations, their funds vanish. “The Extended Benefits program is being phased out because state unemployment rates have stopped climbing, but unemployment is still exceedingly high in many places,” said NELP Executive Director Christine Owens.

There are still more than three job seekers for every available opening, according to the Economic Policy Institute, and more than 30 percent of the unemployed have been out of work for a year or more. Considering those numbers, it makes no sense to cut people off from unemployment benefits, which have ensured that millions of Americans don’t slip below the poverty line. According to the Government Accountability Office, 20 percent of those cut off from unemployment benefits by early 2010 fell into poverty.

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