Benefits reduction takes away safety net from unemployed

Stanislaus County's unemployed are faced with the ultimate good news, bad news scenario.

The good news is that California's unemployment rate has dipped to its lowest level in three years. The bad news is that means the unemployed will receive fewer weeks of unemployment benefits.

The state's drop to an 11 percent unemployment rate this month triggered a federal cutoff of emergency, long-term unemployment benefits to about 93,000 Californians. An additional 100,000 people who would have qualified for the extended benefits before the end of the year will not.

In Stanislaus County, about 1,500 people have been dropped from the unemployment rolls as the number of weeks people can collect dropped from 99 to 79 this month. Last month, when the full 99 weeks of benefits were in place, some 5,200 people in the county exhausted their benefits.

To those looking for work, the reduction in benefits means an important safety net is fraying. At the Employment Development Department Veterans Job Fair in Modesto last week, the reduction of federal benefits was on the minds of many.

Optimism eroding

"I find it frustrating. The more they drop it and the closer you get to the end of your claims, you get more desperate," said Modesto resident Maureen Holmes, an Air Force veteran who has been on unemployment since March 2011, when she left the military.

The 32-year-old has struggled to find work in the tight economy. Last month, Stanislaus County's unemployment rate was 16.4 percent with 38,200 workers looking for jobs. The county's jobless rate continues to outpace the state and national numbers.

Holmes, who lives with her sister, worked in personnel in the Air Force. But as a civilian she said she is just another job seeker in the crowded human resources field.

"It's so hard to not become discouraged," she said. "I have days when I don't have much hope. It's hard to be optimistic, and now even the (unemployment) checks are going to be coming less and less."

California is one of eight states with chronically high unemployment that saw their unemployment benefits reduced by the federal government this month because of improving jobless rates. The others are Colorado, Connecticut, Florida, Illinois, North Carolina, Pennsylvania and Texas.

In March 2009, the federal government began adding extensions to benefits, bringing them to 99 weeks total. State benefits typically are for a maximum of 26 weeks.

Since the extended benefits began, Californians have collected $5 billion in payments. The EDD reports there are more than 1.1 million people in California collecting unemployment benefits.

The federal extension that added an additional 20 weeks of benefits and extended the number of weeks to 99 ended statewide May 12.

Eliminating the 20-week extension was based on the improvement in the state's unemployment rate. But a declining unemployment rate does not necessarily mean more jobs are being created.

Numbers exclude some

Jeff Michael, director of the University of the Pacific's Business Forecasting Center, said unemployment rates in the state and county are affected by the number of people who leave the labor force because they have given up looking for work.

So while still unemployed, they are not included in the unemployment rate.

"The (drop in benefits) is certainly an unwelcome development for the whole state," Michael said. "The unemployment insurance benefits have been tied to the unemployment rate. But you could really make an argument that it's better to tie it to job growth, not the unemployment rate."

Ceres resident Don Kolodzieczak, who went to the EDD and HIREvent job fairs in Modesto last week, said it's that potential disconnect between the drop in the jobless rate and improvements in the job market that worries him. After more than 20 years working in drafting, the 47-year-old lost his job in November. Since then he has been collecting unemployment.

"The job outlook here is still dismal," Kolodzieczak said. "The more people who get kicked off of unemployment, the less people are counted. The less people are counted, the less weeks the state becomes eligible for. It's a domino effect."

Kolodzieczak, whose wife works, said reducing the number of weeks the unemployed can collect benefits may harm a state still struggling to recover from the recession.

"If I got dropped from the rolls, we might not be able to make it. So there's another house up for foreclosure," he said.

Bee staff writer Marijke Rowland can be reached at mrowland@modbee.com or (209) 578-2284.

Unemployment Benefits in California:

• Maximum weeks before May 12: 99

• Maximum weeks after May 27: 79

• Maximum weeks after Sept. 2: 73

• Maximum weeks pre-recession: 26