Sequester brings pain to the long-term unemployed

The across-the-board federal budget cuts known as sequestration are having a big impact on the nation’s long-term unemployed, who have seen their federal jobless benefits shrink by nearly 15 percent, according to a report released Tuesday.

The National Employment Law Project said the cuts lowered the average weekly payment from $289 to $246, further tightening an already difficult situation for workers who have been out of a job longer than six months.

“A family struggling to somehow stay afloat on the average weekly benefit of $289 — before the sequester reductions — is seeing its monthly payments cut by $172,” said Christine Owens, executive director of NELP. “That alone can be the difference between making — or not making — a rent, car or mortgage payment.”

The federal budget cuts took effect in March, slicing $2.4 billion from the benefits paid to the long-term jobless under the Emergency Unemployment Compensation (EUC) program. The federally funded program pays jobless benefits to unemployed workers who have exhausted state unemployment benefits, which typically have a 26-week limit.

States made cuts to their jobless programs in the months after the sequester was triggered, with the deepest reductions hitting in May and June, according to NELP. The states implemented those cuts differently, with some reducing benefits based on how long recipients have been receiving them and others, like South Carolina, designating weeks when no benefits will be paid.

See agency-specific impacts

Although the overall $30 billion in cuts to domestic non-defense spending have gone largely unnoticed by many Americans, the cuts in jobless benefits are taking vital dollars from the long-term unemployed and have affected 3.8 million households, according to NELP.

Maryland was among the states facing the deepest cuts because of the sequester. Average weekly benefits have been slashed from $325 a week to $253 — a 22 percent cut. The state’s maximum jobless benefit, which is paid to 38 percent of the program’s participants, has been reduced from $43o to $335.

In Virginia, average benefits were cut 14 percent, going from $279 to $239. The top weekly benefit, meanwhile, went from $378 to $324.

Average weekly benefits paid to the long-term unemployed in the District went from $287 to $256, and the top benefit — which is collected by 42 percent of the city’s jobless — went from $359 to $321.

Beyond Maryland, the states with the highest-percentage reductions for EUC benefits are New Jersey, where payments are down 22.2 percent; Montana, where they are down 19.6 percent; and Connecticut, where they were slashed by 19.2 percent

In North Carolina, lawmakers chose to end all federal EUC benefits on July 1. The move cut off emergency jobless payments to an estimated 70,000 people, even though the state has the fifth-highest unemployment rate in the nation.

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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