Eight More States Cut from Unemployment Benefits

Over the weekend, more than 200,000 people in eight states saw their federal extended unemployment benefits end, according to an analysis from the National Employment Law Project, which advocates for better employment policies. The cuts to the federal extended benefits program made as of Saturday (May 12) are a result of reductions passed by Congress earlier this year. 

The latest to be cut, 236,300 unemployed Americans, got their notices two and a half weeks ago that their benefits were going away. Those cuts bring the total to more than 400,000 people in 27 states that have been cut from the roles so far this year, and thousands more will fall off by the time the program ends for all states on January 2, 2013.

The formula used to calculate which states should get the extended benefits takes a state’s average unemployment rate for a three-month period, and unless that rate remains 10 percent higher than it was during the same time period in one of the last three years, the benefits are revoked. The goal is to limit benefits in states where the unemployment rate is declining, but Maurice Emsellem, policy co-director at the National Employment Law Project, says the formula is problematic.

“The extended benefits program requires that state unemployment increases over three years,” Emsellem says, “even if the base rate is very high. That feature of this program has a huge impact on high unemployment states.”

For instance, this round of cuts will affect 95,300 unemployed people in California alone, according to the project’s calculations. North Carolina, Florida, Illinois, Colorado, Connecticut, Pennsylvania and Texas will all have more than 10,000 people affected. 

Emsellem says that with federal help running out, state programs like food stamps and job training are the last place for the long-term unemployed to turn. Connecticut’s Governor Dannel P. Malloy recently called on the state’s departments of labor and social services to work together to reach out to people who will be cut from the extended benefits program.

“The silver lining here is that jobs are being created in Connecticut,” Malloy said in a statement, “but if you don’t have a job and are now facing the loss of benefits, you’re being put in an impossible situation. There are state resources available for both assistance and job training. We need to redouble our efforts to make sure that those resources are going to people who need them most.”

According to a recent Government Accountability Office report on unemployment benefits, 45 states provided information or connections to support programs for people who had run out of unemployment insurance benefits.