States readying people for unemployment benefits change

2012-12-15T13:00:00Z States readying people for unemployment benefits changeBowdeya Tweh, (219) 933-3316
December 15, 2012 1:00 pm  • 

State workforce development departments around the country are urging people to prepare for the sunset of a law that provided extended federal unemployment insurance benefits to people separated from their jobs.

That urgency should drive more people to take advantage of services in local workforce development centers in both states, representatives from the Indiana Department of Workforce Development and Illinois Department of Employment Security said.

Without action to extend the provisions expiring at the end of the year, about 40,000 people in Indiana are expected to lose an average of $290 a week and 90,000 people in Illinois are expected to lose an average of $320 a week. The two states had about 310,000 people collecting unemployment benefits in the week ended Dec. 8. 

Indiana Department of Workforce Development spokesman Joe Frank said in November postcards were sent to claimants in the range of seeing their benefits end, urging them to visit local WorkOne offices to find help in securing job training or getting into educational programs.

"We have seen increased traffic because people are starting to understand that federal benefits are ending and I need to work harder in my job search," Frank said.

In recent weeks, Illinois has used direct mail, email, and news releases to media help get the message out to people, said workforce development agency spokesman Greg Rivara.

Expanding and extending tiers of the federally funded unemployment insurance program was designed to provide economic support for the millions of people who lost their jobs in the aftermath of the recent economic recession. The total number of U.S. workers who lost their job and started receiving unemployment benefits peaked in 2009 at 14.4 million, according to a report from the Congressional Budget Office. From that time through early this year, up to 99 weeks of compensation was available for people.

Currently, 63 weeks of benefits are currently available for claimants in Indiana and 78 weeks of benefits are available in Illinois. Next year, a maximum of 26 weeks and 25 weeks of unemployment benefits are available for people in Indiana and Illinois to collect, respectively.

Rivara said the trouble with the current situation is that the funds are shutting off as the need in Illinois remains large.

"Our demand is 38 percent higher than when the recession occurred," Rivara said.

The CBO also said late last month that extending the program would afford greater protection of income lost for thousands of people and lead to more consumer spending, although it would delay the job search for others who are collecting benefits.

The future of extended unemployment insurance benefits may be wrapped up in the political leaders' discussions about how to avoid so-called "fiscal cliff," but Rivara said about $1.63 in economic activity is generated for every $1 of unemployment insurance payments distributed.

The recent peak for Indiana's seasonally adjusted unemployment rate was 10.8 percent in mid-2009 and Illinois' seasonally adjusted jobless rate was 11.4 percent in January 2010. Those rates were at their highest levels since the early 1980s in both states. The jobless rate in October was 8 percent in Indiana and 8.8 percent in Illinois.

Rivara said he expiration of extended unemployment benefits is expected to reduce income for families, but also shut off resources for state workforce development agencies to help people.

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