99 Weeks: When Unemployment Benefits Run Out > In America

99 Weeks: When Unemployment Benefits Run Out

From CBS 60 Minutes:
Scott Pelley Reports On The Growing Number of Americans Who Are Exhausting Their Benefits


(CBS) The economic jam we're in has topped even the Great Depression in one respect: never have we had a recession this deep with a recovery this flat. Unemployment has been at nine and a half percent or above for 14 months.

Congress did something that it has never done before - it extended unemployment benefits to 99 weeks. That cost more than $100 billion, a huge expense for a government in debt.

But now, for many Americans 99 weeks have passed and there's still no job in sight. Some have taken to calling themselves the "99ers."

"60 Minutes" and correspondent Scott Pelley went to several communities in search of the 99ers, but we didn't expect to find such a crisis in Silicon Valley, the high tech capital that many people hoped would be creating jobs.


Even after an extension of unemployment benefits to 99 weeks, many of those about to go off the program are in a quandary. Scott Pelley talks to some of them in Silicon Valley.If you want to understand why the economy is stalled, come to San Jose, Calif., and talk with 99ers like Marianne Rose. "I remember it coming close to like six months. I was saying, 'I can't believe I'm out of work this long.' Then the year mark hit. And I just started just panicking seriously. Now that it's over two years I can't believe it. I just, I can't believe it," she told Pelley.

Rose was a financial analyst at a real estate firm. Age 54, she's single with a grown daughter. After being laid off with about 100 co-workers, she spent her savings, lost her home and finally found herself sitting in a truck with her dog and all of her possessions.

She made a desperate call to a friend and found refuge upstairs in the home of strangers, her friend's brother and sister-in-law.

"How long did you think you would be in here?" Pelley asked.

"Two weeks really. That's all I thought," she replied.

But she told Pelley it has been six month. "And not really an end in sight, yet."

"What sort of things would you be willing to do at this point?" Pelley asked.

"Well, I can say that probably the lowest level position for me has been now to apply for a clerk, a county clerk and I just realized the competition is pretty stiff out there," she replied.

Asked what she meant by stiff competition, Rose explained, "There's a lot of people, speaking of the county. I had applied to those clerk positions. There's actually four positions that were open. I found there were over 2,000 people that applied for those four positions."

Rose is one of at least a million and a half Americans who've exhausted their unemployment checks.

Now, Silicon Valley, the capital of American innovation has a new creation: revival meetings for the unemployed. On weekends, they come by the hundreds.

"60 Minutes" joined a gathering called "Job Connections," held inside a local church.

It's part how-to-find-a-job workshop, part networking opportunity with the feel of a 12-step program.

The people in the group are the faces of unemployment in Silicon Valley, people in their 40s, 50s and 60s who thought they had done everything right: earned a degree, stayed with their company, saved for retirement.

"I'm curious. How many PhDs in this room?" Pelley asked. "One, two, three, four… several. Now leave your hands up. How many master's degrees? Oh boy. And how many of you went to college. Everybody keep your hands up if you have a college degree, a master's degree or a PhD."

Many in the room had their hands up.

"How many of you expected to retire from the company where you were working?" he then asked.

"More than half the room," he noted.

(CBS) "How many of you have cashed out your 401ks? IRAs? Savings accounts?" Pelley asked.

Again, many hands went up.

A lot of them are too young to retire and, maybe, too old to rehire. The longer they're out, the tougher it gets.

Judy Thompson was marking the time before she loses her home. "Three months maybe, and I've been in that house since 1982. I don't want to move," she said.

Asked where she is going to go, Thompson told Pelley, "I don't know. I'm trying' not to think that far ahead. But anyway, didn't mean to get emotional. Sorry."

Sara Huber may lose her family business of 23 years. "Everything's gone and we can't survive 'cause these people can't survive," she explained.

"Because these people don't have jobs, they're not coming to your business?" Pelley asked.

"The equity lines are frozen, Right. People don't have credit. There's nothing there," she replied.

When asked how long her business can go on, Huber said, "We're going month to month, literally. I'm praying for more work."

Jim Wild has been applying for jobs two years. "I've gone through the tier one companies. I've gone through the tier two companies and now I'm down to Target. I just got a job offer from Target to work a part-time job at 9.50 or 9.25 an hour," he explained.

The Target job is floor sales; previously, Wild was a fiber optics engineering manager.

He's taking the job at Target and he's glad to get it.

These folks aren't that unusual: today, nearly 20 percent of the unemployed in America have college degrees.

Silicon Valley lost its jobs in construction, manufacturing and in high-tech engineering that went overseas. San Jose looks the same, but it shrank by 75,000 jobs. Many buildings there stand empty.

The national unemployment rate of about nine and a half percent sounds incredibly high and of course it is. But it doesn't nearly capture the depth of the trouble. It doesn't count the people who've seen their hours cut to part time. It doesn't count the people who have quit looking for work.

If you add all of that together, the unemployed and the underemployed, it's not nine and a half percent, it's 17 percent; and in California it's 22 percent.

And what makes it so much worse is that, nationwide, one third of the unemployed have been out of work more than a year. That hasn't happened since the Depression.

(CBS) "60 Minutes" stopped by the soup kitchen in San Jose. Many folks used to think that they could see all the way to retirement. But now long-term unemployment is wrecking years of saving and planning by people like Lisa and Doug Francone.

Doug was a $200,000-a-year personnel executive.

"You must have thought that you'd get another job pretty quickly," Pelley remarked.

"Yeah. It really didn't cross my mind that I wouldn't find something. The question was trying to take the time to find the right job," he replied.

"You'd have a job in six months, a job that you liked in six months, and how long has it been?" Pelley asked Lisa Francone.

"Two years and three months," she replied.

They had saved for retirement and college for their son and daughter. But most of that is gone. "The unemployment checks were tiny, I can't remember what they were but…," Francone said.

"$475," his wife said.

"Lisa, what were you doing with $475 a week?" Pelley asked.

"Well, by the time we paid benefits, we had enough to pay a bill or two but certainly not meet the mortgage or property taxes or groceries," she replied.

Now their son is going to the military instead of college; selling the house will be next.

Doug Francone took matters into his own hands: he created jobs for him and his son, buying a franchise that cleans air ducts. He spent his 401(k) on this. But, there hasn't been enough business to make money.

"I don't wanna come off like 'Oh you know, woe is us.' There's other people struggling a lot worse than we are. But it's certainly very different for us," he told Pelley.

"You're surprised to be in this place?" Pelley asked.

"Oh, absolutely. Yeah. Shocked really," Francone replied.

Like the Francones, four and a half million Americans have taken hardship withdrawals from their 401(k)s. With savings gone, unemployment checks exhausted, many are coming to charities including the CALL Primrose Center, a pantry of free food.

Mary Watts has run CALL Primrose for 11 years.

"Before the Great Recession began, you were sending out how many bags of groceries in a year? Pelley asked.

"When I started in '99 it was 4,000 bags a year," she replied. "It's going to be 32, to 35,000 bags this year."

"You know these people coming into the pantry now, they must look like professionals," Pelley remarked.

"Oh absolutely, yes, absolutely professionals. Career professionals, people that never, ever would have thought they would be coming in our door other than perhaps as a donor," Watts said.

(CBS) We met Claudia Bruce at the center. She was an office manager making $70,000 a year when she was laid off. Now her 99 weeks of unemployment checks are running out. She never imagined she'd need free food. But then, she never imagined she would be picking out trash to sell to the recycler.

"You do what you have to do. I'm not delighted, but I'm happy to have the money that it provides," she told Pelley.

"The day before you were laid off, what was your lifestyle?" Pelley asked.

"I was a shop-a-holic. Yeah. I was trying to reform myself, but there's nothing like losing your job for a long period of time to completely reform a shop-a-holic," she replied.

Her car has turned into a garbage truck, filled with recyclables.

She's learned a lot. Glass pays more than cans, and she has to be quick to beat the neighborhood homeless guy to the good stuff.

She estimated her haul would bring in $28; instead, she got $33.81.

"Personal record," she told Pelley.

"Did you ever think that $33 would mean so much?" he asked.

"No. But then, I never thought $5 would mean so much either," Bruce replied.

She has applied for hundreds of jobs, from office manager to clerical work. She's had four interviews in two years. She has kept a small apartment with help to pay the rent.

"I do get some help from my mom," Bruce said.

Her mother is 83.

"And so, she's helping you out even now," Pelley remarked.

"Yeah, I'm her baby still, you know," Bruce said.

"You didn't expect to be her baby at this point in your life?" Pelley asked.

"Absolutely not. I thought I'd be helping her now, that she wouldn't be helping me," she replied.

Her benefits will end when she hits 99 weeks soon. No one is expecting Congress to vote another extension of unemployment checks given our historic budget deficits.

As government benefits run out, a lot of people are depending on kindness to take their place.

Marianne Rose lived with her friend's brother for seven months, insisting on cooking and cleaning to earn her keep. In recent days she found a job in a public school. It'll pay about one third what she used to make. It's the best thing to happen in two years, but it's little and late.

"Do you imagine getting your lifestyle back?" Pelley asked.

"No," Rose replied. "Not to the same point now because now I would have to worry about, you know, my old age, in my old age you know its rebuild a nest egg, pay off my debts that I have. That has to happen so now, my lifestyle will not be the same ever, ever again."

For~ CBS videos and more here;
http://www.cbsnews.com/stories/2010/10/21/60minutes/main6978943_page4.shtml?tag=contentMain;contentBody

I think the real unemployment numbers are up in the 20 percent range. Given how bad it is even here my husband took on a second job just to make ends meet. We are not alone and at least he is able to find the additional work. Nursing is a good profession in these times.

My other half lost his job a year ago.

He has submitted hundreds of applications and gone on several dozen interviews.

He has just now exhausted his original unemployment claim due to
census and temp work(thank god!). He has applied for an extension and we are waiting to hear. Had to borrow money from his family for the first time since losing his job.

Despite these difficulties, we are well looked after.

It's really, really rough out there.

We have a government that bails out the world~ but is quite indifferent towards those who's tax dollars paid into and allowed this great rogue scam


Jobless aid loss could choke economic growth
Unemployment benefits boost growth because jobless spend every penny


Yvette Ward who has been unemployed for two years displays a sign during a "Vigil for the Unemployed" at the Arch Street Methodist Church in Philadelphia.

msnbc.com news services
updated 12/1/2010 2:38:53 PM ET 2010-12-01T19:38:53


WASHINGTON — Two million jobless Americans won't be the only ones to feel the loss of unemployment benefits, although they will likely feel it most acutely. The overall economy could suffer too if Congress doesn't act to extend benefits that expired at midnight Tuesday.

Unemployment benefits help boost the economy because the jobless tend to spend every dollar they get, pumping cash into businesses. A cut-off of aid for millions of people jobless for more than six months could squeeze the fragile economy, analysts say. Among the consequences they envision over the next year.

"Look for homelessness to rise and food lines to get longer as we approach Christmas if the situation can't be resolved," says Diane Swonk, chief economist at Mesirow Financial.
Story: Millions may lose jobless benefits as holidays loom

Hours before beefed-up benefits were set to expire late Tuesday, Democrats sought to extend them for another year. But they were blocked by Republican Senator Scott Brown, who said Democrats should have taken time to work out a compromise.

"It's not the way to do business in the United States Senate, and if it is it needs to change," Brown said.

With the unemployment rate stuck at around 9.6 percent, the two parties have been sharply divided over how to cover the cost of weekly checks that help jobless people stay afloat.

The federal benefits start phasing out Wednesday, although Congress could retroactively vote to extend them in the next two weeks.

The average weekly payment for the roughly 8.5 million people receiving unemployment benefits is $302.90. But it ranges widely: from a low of $118.82 in Puerto Rico to a high of $419.53 in Hawaii. Each state sets the amount through a formula meant to replace a portion of a jobless person's old income.

That money ripples through the economy, into supermarkets, gasoline stations, utilities, convenience stores. That allows those businesses to hire more people, who, in turn, spend more money.

The Congressional Budget Office says every $1 spent on unemployment benefits generates up to $1.90 in economic growth. The program is the most effective government policy for generating growth among 11 options the CBO has analyzed.

Mark Zandi, chief economist at Moody's Analytics, puts the bang-for-a-buck figure at $1.61, and a recent Labor Department study estimates it at $2.

Analyst Mark Miller of William Blair & Company figures that, in particular, discount retailers like Dollar General and Family Dollar will see their revenue pinched by a couple of percentage points next year if extended jobless benefits expire.

"If you've been unemployed for six months, you've gone through your savings," says Heidi Shierholz, economist at the Economic Policy Institute. "You have no choice but to spend (jobless benefits) immediately."

By contrast, money given to higher-income families — say, through tax cuts — tends to deliver less economic benefit because those taxpayers typically save a big chunk of their windfall.

In July 2008, Congress extended jobless benefits to up to 99 weeks: 26 weeks of regular benefits from the states, plus up to 73 weeks in federal aid in states with high unemployment rates.

When lawmakers extended the benefits, they were responding to a jobs crisis: Unemployment was on its way to double digits for the first time since the 1981-82 recession. The long-term unemployed — those out of work for more than six months — hit a record-high 6.8 million in May this year. Those people represented 46 percent of all unemployed Americans. That's the highest such proportion on record dating to 1948.

2 million by Christmas
At its peak in the first week of this year, just over 12 million people were receiving unemployment benefits — the most on records dating to 1986. The Labor Department estimates that if Congress lets the aid run out, nearly 2 million people will lose their benefits by Christmas.

Without an extension of aid, the number of impoverished Americans would rise, economists say. The income from unemployment checks kept 3.3 million people from falling into poverty in 2009, according to government estimates. The Census Bureau defines poverty as annual income of roughly $22,000 for a family of four.

Still, some economists worry that renewing jobless aid would discourage some unemployed people from seeking work. A study this year by the Federal Reserve Bank of San Francisco lent some support to that notion. But it downplayed the impact as "quite small."

For most recipients, the average $300 weekly unemployment check doesn't go very far: It covers just half of basic household expenses, according to the National Employment Law Project.

In Glenview, Ill., Robert Horvath is barely hanging on. He says his jobless aid — $385 a week — doesn't amount to even 15 percent of his former income as a commercial loan officer. Out of work nearly six months, he's paying $1,300 a month to keep his health insurance. He's burning through his savings and is trying to hold onto his home of 25 years.

Thirty-three economists have signed a statement circulated by the Economic Policy Institute calling for benefits to be extended for 12 more months. Signatories included Alan Blinder, a former vice chairman of the Federal Reserve, and five winners of the Nobel Prize in economics, including Joseph Stiglitz and Robert Solow.

Republican lawmakers have opposed an extension of the jobless aid if it would enlarge the government's $1.3 trillion budget deficit. They insist that the cost — around $5 billion a month — be offset with budget cuts elsewhere. Those cuts would reduce the economic impact of extending the jobless benefits. Some in Congress want to pair an extension of unemployment aid with a deal to also extend the Bush-era tax cuts.

President Barack Obama and Republican leaders in Congress vowed Tuesday to seek a compromise on their sharply different views about tax cuts before year's end.

"The American people did not vote for gridlock," Obama said following the session. "They did not vote for unyielding partisanship. They're demanding cooperation and they're demanding progress and they'll hold all of us, and I mean all of us, accountable"

There was no consensus on whether to keep Bush era tax cuts in place for the middle class and wealthy alike. But the eight bipartisan congressional leaders and the president agreed to break through their differences by appointing a working group to negotiate a tax cut agreement.

Source;
http://www.msnbc.msn.com/id/40430391/ns/business-eye_on_the_economy/#

Please note this new legislation compromise ~

Deal Doesn’t Help Workers Who’ve Already Exhausted Jobless Benefits


By MICHAEL POWELL
December 8, 2010, 3:39 pm

The recent tax compromise between President Obama and the Republicans may be packed with treats for the upper middle class and the wealthy, but its benefits for the unemployed are perhaps not quite what they appear.

The 13-month extension of unemployment benefits offers no additional help for the hundreds of thousands of Americans who have already reached, or are fast approaching, the 99-week limit on unemployment benefits. By contrast, my colleague David Kocieniewski noted in his article on Wednesday that a quarter of the savings from this compromise will go to the wealthiest 1 percent.

“There is nothing for someone who is in that unfortunate position,” Chad Stone, chief economist at the Center on Budget and Policy Priorities, said of the so-called 99ers.

Unemployment pay comes in four consecutive tiers, and each one offers a set number of additional weeks of benefits, depending on the unemployment situation in a given state. If Congress and the president had not agreed to extend qualifying dates, workers would not have been able to move to the next tier. Thanks to this new legislative compromise, though, many Americans will still be able to move into the next tier of benefits, allowing some to be eligible for up to 99 weeks of benefits. Only workers in states with high enough unemployment rates can qualify for 99 weeks of benefits; currently, 25 states meet this threshold.

But, again, this does nothing for the those hundreds of thousands of workers who have already exhausted their 99 weeks of benefits. In California, for instance, nearly 300,000 people have reached the end of unemployment benefits, and there’s very little good research about what, exactly, has happened to them. Or if someone is on, say the 91st week of benefits, he or she can now get eight more weeks of checks, but after that 99th week, the person will be left high and dry again.

Food stamp applications have spiked, as have applications for long-term disability. But that is a suggestive rather than definitive explanation of what has happened.

Senator Debbie Stabenow, Democrat of Michigan, has proposed extending unemployment benefits beyond 99 weeks — Michigan’s rate is above 13 percent — but her proposal was not on the table in the negotiations that culminated this week. Those favoring an overhaul of the estate tax were decidedly more fortunate: Mr. Obama and Republican lawmakers agreed to take only those estates worth more than $5 million (previously the floor was $1 million), and they agreed to lower the taxation rate to 35 percent, from 55 percent.

Source;
http://economix.blogs.nytimes.com/2010/12/08/deal-doesnt-help-those-whove-already-exhausted-jobless-benefits/?src=busln

also - a related story and figures:

Food Stamp Rolls Continue to Rise


December 8, 2010
By Sara Murray

More people tapped food stamps to pay for groceries in September as the recession and lackluster recovery have prompted more Americans to turn to government safety net programs to make ends meet.

Some 42.9 million people collected food stamps last month, up 1.2% from the prior month and 16.2% higher than the same time a year ago, according to the U.S. Department of Agriculture.

Nationwide 14% of the population relied on food stamps as of September but in some states the percentage was much higher. In Washington, D.C., Mississippi and Tennessee – the states with the largest share of citizens receiving benefits – more than a fifth of the population in each was collecting food stamps.
Food Stamp Use, by State

Click here to see state by state breakdown chart:
http://blogs.wsj.com/economics/2010/12/08/food-stamp-rolls-continue-to-rise/