The long-term unemployed, those who have been out of work for 27 weeks or more, are seeing a big reduction in unemployment benefits thanks to sequestration, according to a new report from the National Employment Law Project (NELP). Federal Emergency Unemployment Compensation (EUC) benefits, which help workers after they exhaust state-level programs around 26 weeks, have been reduced by nearly 15 percent.
Nearly 40 percent of those who are unemployed have been out of work for 27 weeks or more, coming to a total of 4.4 million people. Yet 8 percent of this year’s sequestration cuts are being taken out of the modest benefits provided to these workers, the report says.
The cuts to each check become more severe the longer a state waits to implement them. Maryland and New Jersey are cutting benefits by more than 22 percent. Seven states cut benefits in May and June, reducing checks by 16.8 to 22.2 percent. Other states have eliminated weeks rather than reduce benefits: Maine cut the last eight weeks of benefits and Florida eliminated the last four. California, the state with the most workers collecting EUC benefits, cut checks by 17.7 percent in May alone for 120,000 workers. About 429,000 will experience cuts through September 30 and 531,000 by the end of the year if sequestration continues.
The report comes on the heels of news that North Carolina has been dropped from the EUC program altogether. It cut the level of its weekly benefit payments, violating a provision of the program and leaving it completely ineligible for federal jobless funds.
Unemployment benefits are already low. The United States has one of the stingiest programs in the developed world. While opponents of the program argue that it discourages recipients from looking for work, research has found that they actually work harder to find a new job than those who are not in the program.
It also benefits the economy. NELP’s report finds that the benefit cut in New York will drain $5.1 million in consumption per week from its economy, while in New Jersey it will dry up $10.2 million. Had Congress not extended the EUC program at the beginning of the year, it would have cost the economy 300,000 jobs.