Extended jobless-benefits cut in eight states

More than 230,000 jobless Americans will lose their unemployment insurance by this weekend as reductions in the federal program that provides extended benefits to the long-term unemployed take broader effect.

The new round of reductions is hitting eight states this month, meaning that about 400,000 long-term unemployed Americans in 27 states will have been cut off of the federal government’s extended unemployment benefits program this year, according to an analysis by the National Employment Law Project, which advocates for the unemployed.

The cuts stem from a congressional agreement this year that will reduce the maximum duration of unemployment benefits from 99 weeks to 79 weeks as the nation’s jobless rate declines.

Most states provide 26 weeks of benefits, and the federal government provides the rest, partially through a complicated formula that requires jobless rates to be both high and increasing to reach the benefit limit.

But the nation’s jobless rate has been steadily declining — from 9.1 percent in August, to 8.1 percent last month — causing the maximum benefit period to contract in most states. The extended benefits were reauthorized in February, but efforts by some Democratic lawmakers to adjust the formula in a way that would have kept the 99-week limit intact were unsuccessful.

Although unemployment rates are declining, job growth remains weak. More than 5 million Americans have been out of work for at least six months, and the average duration of unemployment for the 12.5 million jobless Americans is 39 weeks, according to the Department of Labor.

The GAO estimates that 2 million people exhausted unemployment benefits as of early 2010, and although some had spouses or accumulated assets for financial support, nearly one in five fell into poverty. An additional 3.5 million exhausted benefits in late 2010 and 2011, the GAO reported.

“These cuts are coming faster than the economy is improving, which means more workers will have to survive without any jobless assistance, and families will have less money to put back into the economy,” said Christine Owens, executive director of the National Employment Law Project.

This month, the maximum unemployment benefit period is being reduced in eight states: California, Texas, Pennsylvania, Florida, Illinois, North Carolina, Colorado and Connecticut.

Michael A. Fletcher is a national economics correspondent, writing about unemployment, state and municipal debt, the evolving job market and the auto industry.
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