AUG#: +130,000 jobs.

Unemployment up at 3.7%...AUG jobs under Trump HERE

Saturday, December 28, 2013

Unemployment Benefit Extensions Expire: What Does That Mean?

Unemployment in the Spotlight.. Finally!

We haven't heard that much about the unemployed over the past year.  There aren't that many articles about unemployment anymore, the articles that are published about unemployment aren't that well read, and many Americans seem to have forgotten that we still have ten million people who are actively looking for work every month, and that about 6.7 million of those 10 million are people 25 and over looking for full-time work.  (1.9 million are young people, 16 to 24, looking for full-time work, and the rest of the unemployed, about 1.6 million, are looking for part-time work.)

Unemployment extensions set to expire

But unemployment extensions are now set to expire, and the unemployed are again in the spotlight.  I've been reading many articles about unemployment over the last few days, and the comments to those articles.

So let's attempt to sort the myths and mysteries about unemployment and unemployment extensions in this country.

Myth #1:  The unemployment rate is still going up and things are still horrible.

 The unemployment rate actually peaked in late 2009 and has come down ever since.  It is now almost a full point lower (7%) than it was when Obama took office (7.8%).  The number of people who are unemployed now is down by over a million compared to the month that Obama took office, and the number of "prime" unemployed, those 25 and up looking for full-time work, has decreased by two million, despite an increase of over a million in the "civilian labor force".  

Myth #2:  These extensions just keep going on and on.  99 weeks?  Why should anyone look for work?

FALSE:  Nobody has ever received unemployment benefits for longer than 99 weeks without getting a job, working again (for at least a year) and requalifying for benefits.  The total number of weeks of unemployment has been tied into a state's unemployment rate, and as the unemployment rate has fallen everywhere over the past four years, the weeks of available benefits have also fallen.  Right now, 73 weeks of benefits are only available in two states, and most states only offer 43 to 63 weeks.  Many states offer 42 weeks or less.       

And the average benefit is about $300/week, less in some states.  I can't really imagine someone living the life of Riley on $300 bucks a week and being happy about it.  

Despite the negativity and protests of Republicans, there is NO incentive, not now, never was, for people to just kick back on unemployment benefits, unless they have another, significant wage earner in the house.  The benefits don't pay the bills; they don't come close.

Myth #3:  When unemployment benefits end, the unemployment rate will go down.  Obama WANTS the unemployment benefits to end because then the unemployment rate will go down.  (or:)  Republican governors WANT unemployment benefits to end because then the unemployment rate will go down.  (I've heard both.)

This is one of the biggest myths out there.  From another article here:

The monthly unemployment rate is completely separate from the weekly jobless claims reports. They use different inputs. That weekly questionnaire that people need to submit if they are getting unemployment benefits is NOT input into the monthly unemployment numbers. There's NO connection.
So the unemployment rate will not go down just because people are no longer receiving benefits.  In fact, now we have about 10 million officially unemployed and only about 5 million are receiving benefits.

Now indirectly, the end of benefits MAY influence the unemployment rate.  As a condition of receiving unemployment benefits, people MUST look for work.  People who don't have work but are looking for work are counted as unemployed.  People who do not receive unemployment benefits do not have to look for work.. unless, of course, they really want work!  It is conceivable that some people really don't want or need to work and they were looking for work just to collect those benefits.  But, if so, those people really can't need work that badly, can they?  Anyway, if someone who was collecting benefits decides that they really don't need to look for work when there are no more benefits, then they would not be counted among the unemployed.  If there are enough people in that situation; that is, people who decide, after the unemployment benefits stop, to just sit around the house and not bother to look for work; then the unemployment rate might decline.   

Myth #4:  I was just laid off a few weeks ago, and my benefits are going away!

FALSE:  Basic state benefits are NOT going away; however, those benefits only provide 19 weeks (North Carolina) up to 26 weeks (most other states).  The median length of unemployment is still 17 weeks, which means that a large percentage of the unemployed will NOT be able to find work before their unemployment benefits expire.

Myth #5:  I will get no more money in my account starting today.

NOT QUITE:  This is the last day of the last week for which people can now certify for federal extended benefits (the "Tiers").  Most states require people to certify sometime between the last day of the week and the next 2-3 days of the following week.  Most benefits are received a few days to a week later.

People who are claiming this week, the week ending December 28th, would generally receive their checks one week to ten days later, or sometime during the week ending January 9th.  The first check that those on extensions will miss would be the check that they would get sometime in the week ending January 20th, as most states only pay benefits every two weeks.  There IS time for Congress to get back and pass a bill to extend unemployment benefits without a break (or with only a short break) in benefits for the affected people.       

Myth #6:  All long-term unemployed people get extended benefits.  

FALSE:  Actually, only a fraction of the long-term unemployed are eligible for benefits.  People who quit their last jobs generally don't get benefits (some exceptions, but not many); people who are entering or re-entering the job market (think graduates) generally don't get benefits; and people who are among the very, very long-term unemployed don't get benefits.  3.3 million people are among those who have been unemployed for 52 weeks or longer, and most of those 3.3 million are not eligible for extended benefits,  as most states end benefits at 43 to 63 weeks now.

Myth #7:  "There are jobs out there.  Work two jobs at McDonald's before you take unemployment."

NOT QUITE:  Here's the whole spiel from someone posting at NBC:

"I'd would work 2 jobs at McDonald's before going on unemployment. Obviously, these people found it easier and more profitable to get government assistance. There are jobs out there. One just has to go out and get one."

I wonder how much this guy got paid for posting this crap.  Here are the facts:
  • There are still about 2.7 jobseekers for every job opening out there.  This is down from almost 7 jobseekers for every job opening back in late 2009/early 2010, but it still means that people can't just bounce right out there and get a job.
  • There is no guarantee that someone can go to the nearest McDonald's and get a job, particularly if you are "overqualified", have bad credit, and/or have some other "issue".  Anyone who thinks that anyone can go to a McDonald's or other fast food place and get a job has never tried it.  Not only that, but most fast food jobs start as part-time jobs.  People on unemployment who are working part-time jobs may still qualify for some benefits.
  • There is nothing "profitable" about earning an average of $300/week on unemployment benefits.  Anyone who says such a stupid thing has brains where he sits.

I'll add to this as I see more myths slung about on various places on the Internet.

1 comment:

  1. Good morning. ( Per your "About" query, I came here via a link from a fellow retiree @FB.)

    As a union-retiree, I've been around an unemployment office or two. I can attest that almost everyone there filling out a form is desirous of work rather than being there. Of course, UI claims personnel are relieved to see the applicant is a union worker, since we usually have to file at least once every few years, or months, sometimes, and we're really good at it by now.

    Another thing that is not discussed, beside the fact that the meager check each week is certainly not enough to want to live off of it, is the fact that most people like me get very antsy when we're not in the workforce. We might hate our jobs, but we hate not having one much more. My ex-wife will attest to my usual routine. I love the time off, for about a week, but by the end of that first weekend, I've gone from "short vacation!" to "I'll never work again! No! Why aren't they calling for my awesome work?!" And that's just the mindset of a union man who knows he will be called as soon as something breaks. I can't imagine what it must be like for someone who's been with a firm for a long time and finds themselves out on the street.

    Anyway, I'm retired now, and I will never forget just how fortunate I am to have a pension. It's unconscionable that so many in government see that benefit as evil.


I appreciate intelligent comments and questions, including those that are at odds with anything posted here. I have elected not to screen comments before they are published; however, any comments that are in any way insulting, caustic, or intentionally inflammatory will be deleted without notice. Spam will also be immediately deleted.