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Worcester Activists Fighting to Keep Unemployment Benefits Alive

Saturday, October 20, 2012

 

Local employment advocates are warning of the impending disaster if Congress does not take action to extend the unemployment insurance benefits set to expire at the end of this year.

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.

Christopher Horton of the Worcester Unemployment Action Group (WUAG) said an estimated two million people will be affected if the law is allowed to expire.

That is why Horton and the WUAG are joining forces with the National Employment Law Project to put maximum pressure on Congress to enact a new EUC extensions law.

"This is all being done on the assumption that the unemployment crisis is getting better and all people need is a push," said Horton.

"People are looking at disaster."

The national unemployment rate finally dipped below 8 percent last month to 7.8 percent, but with period of unemployment more than double its level in healthy economic times, the situation is still very much an emergency for the long-term unemployed.

With the September changes to the law, Horton said a substantial number of people already lost their unemployment benefits prematurely.

WUAG is currently in the process of organizing a Massachusetts town hall forum in Worcester to mobilize Bay Staters around the EUC issue and the group's advocacy for the Humphrey-Hawkins 21st Century Full Employment and Training Act would introduce an financial transactions tax on stock and futures trades and credit default swaps at rates of a fraction of 1 percent. That revenue would then be used to fund a direct jobs program and allocated based on a formula similar to that used for federal Community Development Block Grants.

"The government has to step in and take money from those who are sitting on it and use it to put people back to work, and their spending will then drive an expansion in the private sector," said Horton.

 

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