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MA Unemployment on the Rise as Benefits Dry Up

Tuesday, November 20, 2012

 

Out-of-work and underemployed residents across the Commonwealth are finding themselves in increasingly dire straits as the state's unemployment rate continues to rise and emergency unemployment benefits are set to expire at the end of the year.

The state's Executive Office of Labor and Workforce Development reported last week that the total unemployment rate inched up from 6.5 percent in September to 6.6 percent in October, even though the Commonwealth added an estimated 7,900 jobs during the month.

Similar trends could be observed on the national level as well, where the unemployment rate rose to 7.9 percent even as the number of employed individuals increased by 171,000 from September to October.

Chris Horton, an activist with the for the Worcester Unemployment Action Group (WUAG), said the fact that both the unemployment rate and the number of employed workers increased when they should be moving in opposite directions highlights the shortcomings of the official, or U-3, unemployment rate, which omits many categories of job-seeker whom might otherwise be included.

“What we are seeing in Worcester is that the proportion of people who report to us being out of work is much larger than the official rate,” Horton said.

"By excluding long-term discouraged workers, who form a pool of job seekers of unknown size that can flood into or out of the workforce unexpectedly, the U-3 rate can move up or down with little relationship to the ‘real rate’ of joblessness.”

For those long-term unemployed and discouraged workers, unemployment benefits are sometimes all that stands between them and homelessness, but with emergency extensions nearing their expiration date, those job-seekers may be facing a new set of worries.

The Middle Class Tax Relief and Job Creation Act of 2012, passed in February of this year, scaled back the federal Emergency Unemployment Compensation (EUC) program and instituted an expiration date of January 2, 2013.

Created in 2008, EUC provides benefits to individuals who have exhausted regular state benefits. In Massachusetts and the vast majority of states, regular state unemployment insurance benefits are available for a maximum of 26 weeks.

The EUC program added a four tier system, based on state unemployment rates, onto regular state benefits ranging from 20 weeks to 6 weeks in duration and offering out-of-work residents a maximum of 99 weeks of unemployment insurance benefits under all possible extensions.

However, the program has been progressively scaled back over the course of 2012, and as of September, the EUC program's 20-week Tier 1 benefits have been cut back by roughly a third to a maximum of 14 weeks.

When the average period of unemployment was the normal 15 to 20 weeks of a healthy labor market, the 26 week maximum was adequate. But as the average duration of unemployment has risen to unprecedented levels of 40 to 45 weeks, extended benefits are a must.

As of now, anyone who is past their first 26 weeks of regular state unemployment insurance benefits at the end of the year will see their payments stop immediately.

“This is no time for Congress to let the Unemployment Extensions lapse, as they’re set to do at the end of December," said Horton.

"We’ve already lost half a year of eligibility for compensation since January, and we’re set to lose another 26 weeks on Dec. 31 unless the Lame Duck Congress passes a new Emergency Unemployment Compensation law. But one job seeker after another tells us that for them, there’s just nothing out there.”

WUAG will hold an Unemployment Round Table on Tuesday, November 20, from 12:00-2:00p.m. at St. John's Church, 44 Temple Street, to discuss its "Campaign to Save the Extensions" and work on outreach to the unemployed, outreach to other groups to engage them in the effort and how to make the campaign statewide.

 

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