Jobless picture soon to worsen

End of benefits loom, and valley could be hit hard

By Tamara Lush
The Associated Press

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More than 1.3 million Americans' unemployment insurance benefits will run out by the end of the year, placing extra strain on an economy that is just starting to recover from the worst downturn in a generation.

Of the nation's 14.5 million jobless, those whose benefits are drying up — in some cases after a record 18 months of government support — are the most unfortunate.

In California, the state Economic Development Department said as many as 170,000 of the unemployed it serves are at risk of losing their benefits.

PDF: People who have exhausted their unemployment benefits

That could be particularly bad news for the Northern San Joaquin Valley, which has seen unemployment spike to levels not scene in more than a decade.

Stanislaus County's unemployment rate was 16.3 percent in July, and other counties in the region didn't fare much better. California's unemployment rate climbed to 11.9 percent in July, the highest number in modern record-keeping.

The valley's economy has been rocked by a dramatic downturn in the housing market, which recently has shown some improvement. But job losses in construction, finance, real estate and related fields have spread to manufacturing, auto dealerships, restaurants and retailers. Gottschalks and Mer- vyn's are among those that have closed.

The government said Thursday that 570,000 laid-off workers filed new claims for unemployment benefits last week, and the number of people receiving benefits has risen to 6.23 million.

The Labor Department is expected to report today that the August jobless rate rose to 9.5 percent, up from 9.4 percent in July.

Many are scrambling to find work before they have to reach for the next layer of government aid — food stamps or even welfare.

"People are just barely getting by," said Sue Berkowitz, the director of the South Carolina Appleseed Legal Justice Center, an advocacy group that helps the poor with legal issues concerning rent and mortgage contracts. "When I go down to our food bank, I see a lot of people who never, ever thought that's where they would be."

Exhaustion rate high

In the past year, nearly 5.5 million people exhausted their 26 weeks of standard benefits without finding work. The government says the "exhaustion rate" is the highest on records dating from 1972.

Some 3.4 million people depend upon extended benefits approved by Congress lasting from 20 weeks to a year, the longest period of extensions ever added.

The length of these extensions vary by state, depending on the jobless rate. More than half of all states have unemployment rates that triggered 53 weeks of extended benefits.

The government does not track how many jobless Americans have exhausted their standard and extended benefits, but experts estimate the figure to be nearly 100,000 and rising.

According to the National Employment Law Project, more than 402,000 Americans will exhaust their unemployment benefits by the end of September. That figure will more than triple by the end of December unless Congress — or individual states — authorizes another extension.

Legislation has been introduced to provide 13 weeks more of unemployment benefits in states with high job- less rates; the bill, introduced by Rep. Jim McDermott, D-Wash., has 23 co-sponsors, including two Republicans.

Unemployment benefits play an important part in stabilizing the economy because recipients tend to spend their weekly checks, rather than save the money or pay down debt.

"It's definitely a valuable component of economic stimulus," said Alan Auerbach, a professor of economics at the University of California at Berkeley.

Trying to maintain a good attitude is key, said Mike Allen of Riverside County, who received about 13 weeks of unemployment benefits earlier in the year. He wasn't eligible for more because he owned his own business and didn't pay enough into the state's unemployment fund to qualify him for more assistance.

Allen, who is 41, moved his wife and 15-year-old daughter into his parents' home in early August. "They've got a small house," Allen said. "But it's a roof. We'll help out with food."