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Unemployment Benefits Seen Falling Over 'Fiscal Cliff'

Dec. 28, 2012

Emily Roach

Unemployment Benefits  

The federal government is about to snip the strings of the safety net for 119,000 Floridians who face being cut from the unemployment compensation rolls at the end of the year.

A $30 billion extension of unemployment insurance benefits is in President Barack Obama's proposal to manage the fiscal cliff. If nothing happens by Monday, the programs end. Emergency benefits were extended for 2012 in February after months of partisan debate.

Here in Palm Beach County, that's 7,342 people who were receiving the emergency unemployment benefits as of the first week of December. Blonise Celestin of West Palm Beach was one of the unemployed who got a letter last week telling her the benefits are gone as of Saturday.

"I want to go back to work," said Celestin, a licensed practical nurse who expects to get her registered nursing certification soon. She said she worked for 15 years before spending much of this past year on unemployment.

These federal extended benefits pick up when state benefits end -- that's now 23 weeks in Florida and will fall to 19 next year. The payment is a maximum of $275 in Florida before taxes -- $6.86 an hour, well below the state's minimum wage of $7.79. In November, 30 percent of U.S. unemployed workers had been without a job for a year or more.

The weekly benefit pays for groceries, a bill, maybe some gas to go to a job interview, said Hada Deeren of Loxahatchee.

"It's not a lot of money," she said while at a required training assessment at Workforce Alliance this week. "It doesn't help a lot, but it helps."

Valory Greenfield of Florida Legal Services said people receiving unemployment benefits are unable to even feed their families at times much less buy Christmas presents, and many face losing their homes.

"I don't think this is a good situation for the safety net whatsoever," Greenfield said. "I can tell you that if you are among the 8 percent that doesn't have a job and you are among the long-term unemployed who are losing federal benefits, it doesn't feel good to you."

She also is involved in a complaint against the state of Florida over unemployment benefits. Her group partnered with the National Employment Law Project this year, and their complaints about the mandated online application spurred the Labor Department to investigate the state's system.

"I think it's a dire problem," said economist Jorge Salazar-Carrillo, director of the Center of Economic Research at Florida International University.

But even if the fiscal cliff is avoided, he said, the country and the state cannot afford to keep paying extended weeks of benefits. The government takes the money from one pocket to put into another pocket, he said.

In fact, the federal government loaned the state money to pay its share of the benefits when the trust fund ran dry during the recession, and the state cannot afford to extend benefits either, he said.

Such groups as the Florida Chamber of Commerce have backed the state's reduction as a way to encourage business development.

The unemployment insurance tax is paid by employers. In 2012, Florida businesses paid between $120.80 and $432 on each worker. It was scheduled to go up, but the chamber and other groups fought to save employers from increased taxes during the faltering economy.

Now is not the time to put the burden on unemployed people either, said Chad Stone, chief economist for the Center on Budget and Policy Priorities. The federal government has never discontinued the post-recession emergency benefits when the unemployment rate was above 7.3 percent. Now, the national rate is 7.7 percent and Florida's rate 8.1 percent.

Losing $300 a week is difficult for people who have already exhausted their resources, he said. And it's $300 they are not paying to the landlord, mortgage, electric bill or children's clothing store. Economic studies show unemployment benefits are spent immediately, and contribute to the economy during slowdowns.

"That's a hardship for people, and it takes spending out of the economy," Stone said.
2,140,389 -- U.S. workers losing extended unemployment benefits*

118,976 -- Florida workers losing extended unemployment benefits*

7,342 -- Palm Beach County workers losing extended unemployment benefits*

$275 -- maximum weekly unemployment payment in Florida

$231 -- average weekly unemployment payment in Florida**

$302 -- average weekly unemployment payment in U.S.**

$3 billion cost to fully fund another year's extension in 2013

Source: Florida Dept. Economic Opportunity, U.S. Labor Dept.

-- As of week ending Dec. 1

--* For month of November


Distributed by MCT Information Services

Source: (c) 2012 The Palm Beach Post (West Palm Beach, Fla.)

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