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Jobless to feel pinch of federal cuts

Payments to the state's long-term unemployed will soon be trimmed 17.7%.

April 18, 2013|By Marc Lifsher, Los Angeles Times
  • A job fair for veterans at USC in Los Angeles last month.
A job fair for veterans at USC in Los Angeles last month. (Kevork Djansezian / Getty…)

SACRAMENTO — An estimated 400,000 Californians who have been unemployed for more than six months soon will be feeling the bite of federal spending reductions.

As of April 28, they'll be getting a 17.7% cut in their weekly unemployment benefits that are paid out by the U.S. Treasury.

The state Employment Development Department announced the cuts Wednesday. They are part of the automatic federal government budget cuts known as the sequester, which took effect March 1 after Congress and President Obama failed to agree on an alternative austerity plan.

"This is a serious hardship for every unemployed family that by definition is stretched to the limit because they are long-term unemployed," said Maurice Emsellem, the Oakland-based policy co-director of the National Employment Law Project, which advocates for low-income wage earners. California in February posted an unemployment rate of 9.6%, tied with Nevada and Mississippi as the highest in the nation.

Slashing unemployment benefits, which average $297 a week in California, will not affect those laid-off workers currently getting an initial 26 weeks of assistance from the state-run and state-financed program. After 26 weeks, those workers are eligible for up to 47 more weeks of benefits paid by the U.S. Treasury. Only the federal benefits are being reduced.

The state estimates that the average long-term unemployed Californian will lose $52 a week.

The state's maximum benefit is $450 per week. Those recipients would see a weekly trim of $79.

"I'm not too happy with that," said Dave Gayton, 54, a laid-off warehouse worker from Half Moon Bay, south of San Francisco. "It seems like every time we have a problem, and they can't come up with a budget, they want to attack someone. It's always the working class that gets hit the hardest."

Gayton said he received a notice from the state Wednesday about the upcoming benefits cut.

The cutbacks will be phased in over several months depending on when people enrolled for benefits, according to the state Employment Development Department.

Notices detailing how the cuts will be enacted are being mailed to recipients this week, the agency said. Recipients also can check their estimated reduction using a "Sequestration Reduction Calculator" at http://www.edd.ca.gov.

Living with the cuts will not be easy for the jobless, said Pam Harris, director of the Employment Development Department.

"We understand that unemployment insurance benefits are often their only shield against economic disaster and that cuts in those benefits can be very challenging," she said. "But we want to get word out so that those relying on these federal benefits can at least prepare for the reductions."

California's long-term unemployed affected by these cuts represent about one-tenth of an estimated 4 million workers nationwide. But both the state and the national numbers are expected to grow as the year goes on and more people move from state-financed programs to the sequester-slashed federal one.

In the meantime, the sequester cuts are weakening the state's efforts to help the unemployed in other ways. The Employment Development Department is losing $3.3 million in federal money for administering the unemployment insurance program. Additionally, funding for the state's Workforce Investment Boards, which operate job centers, is being cut by at least $15 million.

Last year, the Employment Development Department paid out $13.7 billion in federal and state unemployment benefits, averaging about $264 million per week.

marc.lifsher@latiimes.com

Times staff writers Shan Li and Ricardo Lopez contributed to this story.

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