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Federal budget standoff is nerve-racking for state's long-term jobless

Emergency unemployment benefits are scheduled to expire Dec. 29 unless Congress and Obama agree to an extension. That has 400,000 Californians on edge.

November 28, 2012|By Marc Lifsher, Los Angeles Times
  • "There’s going to be millions of us who, basically, will be out in the streets,” Lis De Bats, 54, of Agoura Hills says of the impending expiration of emergency unemployment assistance. She was laid off in January from a job as a new-home sales manager.
"There’s going to be millions of us who, basically, will be… (Anne Cusack, Los Angeles…)

SACRAMENTO — The federal budget crisis in Washington known as the "fiscal cliff" has an estimated 400,000 long-term jobless Californians on the edge.

A 41/2 -year-old program of emergency federal jobless assistance, which provides many of the state's unemployed up to $450 a week in benefits, is scheduled to expire Dec. 29 — unless Congress and President Obama agree to keep it going.

Nationwide, about 2 million people face a cutoff in unemployment benefits, estimated to cost $30 billion in the coming year. An additional 1 million jobless workers are expected to lose state benefits by March.

"There's going to be millions of us who, basically, will be out in the streets," said Lis De Bats, 54, an Agoura Hills resident laid off in January from a job as a new-home sales manager. "I'd lose my home and everything that goes along with it. I've used up all my resources."

Quiz: How much do you know about the fiscal cliff?

Although the federal budget debate has prompted worries in many sectors of the economy, including federal workers and aerospace workers in Southern California, the threat to these emergency benefits is especially nerve-racking to those with no other means of support.

In California, notices of the impending loss of benefits are being mailed this week. The letters also provide information about other types of state support, including food stamps, welfare and healthcare programs for the poor.

And the benefits are important not just to needy individuals and families but also to economically hard-pressed communities, economists say.

"If you take money out of the economy, it will slow economic growth," said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto. "What's happening in Europe should show us that taking money out of the economy leads to recession."

So far, the nation's policymakers on Capitol Hill and in the Obama administration haven't reached an agreement on whether to extend unemployment benefits, keep the President George W. Bush-era payroll tax cuts, and allow automatic federal spending reductions to kick in, among other options, before Congress adjourns at year's end.

The uncertainty is troubling for Eric Silvern, 53, a Culver City high school teacher laid off in June 2011 and whose federal benefits were scheduled to run out in April. But now they may be gone by the end of the year.

"I'm very scared because I'm eligible for four more months, and I totally depend on them," he said. "I'm biting my nails every day worrying about it. In the past, they postponed the cuts, and I'm hoping they do that again."

For many chronically unemployed, those who haven't found steady work more than a year after being laid off, these emergency benefits are often their only way to pay for mortgages or rent, food and gasoline. As of October, about 35% of the state's nearly 2 million jobless had been out of work for 52 weeks or longer, according to the state Employment Development Department.

De Bats of Agoura Hills said she applies for an average of 50 jobs a week only to see the few openings filled by lower-paid, entry-level job seekers.

"I've cut everything to the bare minimal needed," she said. "It's been really tough."

Her predicament is typical of a large group of stubbornly unemployed despite gradual improvements in both the California and national economies, experts said.

California's unemployment rate in October dropped to 10.1% from 11.5% in October 2011. Still, the state had the third-highest unemployment level in the nation after Nevada and Rhode Island. The national rate was 7.9% in October.

The unemployment insurance program was "only designed for temporary sustenance while looking for a new job. It was never a substitute for welfare," said Employment Development Department spokeswoman Loree Levy.

"What we have is a crisis of long-term unemployment," said Maurice Emsellem, policy co-director on the West Coast for the National Employment Law Project, which advocates for the jobless and working poor. "We've never had this many people unemployed for this long."

Whether the federal unemployment payments get another extension remains uncertain. Unemployment benefits got little attention during the presidential campaign. But the president did address the issue publicly at a town hall meeting in Cincinnati last summer when he responded to a question from the daughter of an out-of-work construction worker.

"We'll continue to negotiate with Congress to make sure that unemployment is there," Obama responded. "But the most important thing I want to do is make sure your dad can get a job."

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