Why 500,000 Unemployed Workers Are Losing Thousands Of Dollars In Jobless Benefits

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"Why 500,000 Unemployed Workers Are Losing Thousands Of Dollars In Jobless Benefits"

Our guest blogger is Joanna Venator, an intern with the economic policy team at the Center for American Progress Action Fund.

In its latest unemployment release, the Bureau of Labor Statistics reported that the national unemployment rate remained “essentially unchanged” at 8.3 percent. Twenty-seven states reported unemployment rate increases.

Though job creation remains sluggish, the federal government has been phasing out unemployment benefits since the beginning of 2012. Since January, thirty-one states and the District of Columbia have aged out of the Extended Benefits (EB) program, a federal program which provides aid for unemployed workers in states with extended periods of unemployment.

This has resulted in more than half a million people losing benefits. The last state to receive these benefits, Idaho, was phased out of the system last Saturday.

Why are these states no longer eligible for extended benefits? Is it because they no longer have high unemployment? Unfortunately, no. Many of these states have unemployment rates even higher than the national average, including some with rates over 10.0 percent.

But eligibility for EB is determined both by a state’s unemployment rate and a comparison of the unemployment rate during the past three years. States are falling out of the program not due to significantly lower unemployment rates, but instead because unemployment has been consistently high since 2009, with today’s rate an “improvement” by comparison.

The loss of Extended Benefits is a huge blow to unemployed workers. Losing 13 to 20 weeks of UI benefits is the equivalent of losing $3900 to $6000 of income on average.

Based on U.S. Census estimates of income for unemployed workers and the federal poverty level for a four-person family, a loss of $6000 for unemployed workers would push around 1.4 million people into poverty. U.S. Census data shows that UI benefits (federal and state combined) kept 3.2 million people above the poverty line in 2010.

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