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home : news : business   May 25, 2016

1/15/2014 6:50:00 AM
End of the line for jobless benefits?

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By the NewsTribune staff

Papa John’s Pizza in Peru closed in mid-November, sending manager Tiffany Adamson of La Salle and 13 others to unemployment.

Christmas was a particularly tough time for Adamson, a 24-year-old mother who didn’t find “a whole lot of interviews” around the holiday season.

“If I didn’t have my fiancé I wouldn’t have been able to make it,” said Adamson, who’s getting married in March. “If it had just been me and (my daughter) I would have had to move back with my parents. I can’t even imagine if I owned my own home, what I would do then.”

Adamson is among the Illinois Valley’s displaced workers waiting to see what happens on Capitol Hill, where lawmakers still were wrangling over whether to extend unemployment compensation or leave workers such as Adamson to deplete their savings while looking for work.

“I commend those who want to work on a bipartisan basis to solve this, but let’s get it done,” U.S. Sen. Dick Durbin (D-Ill.) said Tuesday, imploring Congress to extend unemployment insurance and restore benefits to 81,867 Illinoisans who were recently cut off.

“If Congress does not act,” he warned, “230,500 in Illinois will lose access to benefits by the end of the year. Last year in Illinois alone, unemployment insurance lifted 184,000 people, including 50,000 children, out of poverty.”

But at a time when the Affordable Care Act has lawmakers and the public debating entitlements versus the social safety net, whether to extend unemployment is drawing opposing views.

David Boelk said the end of long-term unemployment might be a good thing. Whether he’s speaking as the mayor of Mendota or vice president of a family-owned trucking company, he knows there are jobs out there — they just might not be the most lucrative.

“They’ve made it so much easier to look in your mailbox for your check,” Boelk said. “What incentive is there out there anymore?”

Mendota has been hit with job losses lately with R.R. Donnelley closing the local plant followed by the loss of Bay Valley Foods. Most of those former employees have now found new jobs in the area. He knows of several people working in Dixon, Rochelle and DeKalb and they were able to find new jobs shortly after the Mendota plants closed.

“It’s not as good as having them employed here in town,” he allowed. “It would be better if they were right here.”

One local economist thinks Congress would make a mistake not extending benefits.
Abhijeet Bhattacharya, an economics instructor at Illinois Valley Community College, said failure to extend the unemployment insurance benefits will have an adverse impact on the national economy.

“It is essential that Congress fixes the problem by enacting legislation to restore the program,” Bhattacharya said. “Even though it is a temporary program, economic conditions in the U.S. have not yet improved enough to end it. Presently, the (national) unemployment rate is 6.7 percent. However, the labor force participation rate has been decreasing and jobs are still hard to find for majority of the population.”

Bhattacharya said about 1.3 million people already have lost their unemployment insurance benefits this year. An additional 3.6 million people are expected to lose access to unemployment benefits beyond 26 weeks by the end of 2014.

“Empirical research has shown that emergency unemployment compensation does not discourage people from searching for jobs,” he said. “The program should be terminated at an appropriate time in the future. However, the time has not yet come to end the program.”

Unemployment is paid every two weeks and benefits for many workers come from the State of Illinois, explained Greg Rivara, spokesman for the Illinois Department of Employment Security. Workers can earn 26 weeks, or about six months, of unemployment paid by employers.

Anyone receiving this now will continue to receive it within their 26 week allotment, regardless of what Congress decides.

“If you’ve been collecting less than 26 weeks you will continue to collect,” Rivara said. “More than 26 weeks? This is the last week you’re going to collect.”

When workers exhaust their state unemployment, they might qualify for federal Emergency Unemployment Insurance (EUC), what has been called long-term unemployment. Last month, Congress allowed this program to expire after lawmakers argued the government can’t afford it and unemployment checks don’t help people find work.

The EUC program began in 2008 under President George W. Bush when the recession hit and other than very minor interruptions, has been extended 11 times since then, Rivara said.

The length of extended benefits began at 73 weeks and when this was added to state unemployment, it gave workers 99 weeks. However, as the economy slowly improved, the period has been ratcheted down in tiers and was at 47 weeks when Congress failed to renew it.

“The federal EUC was broken into different tiers and when the economy reached certain benchmarks the tiers would fall away and the terms got shorter,” Rivara said.

Regardless of when a worker began getting federal EUC benefits, non-renewal by Congress put a hard stop on it, Rivara said.

“So what we have is Congress has yet to decide if it will renew EUC,” he said. “The program officially ended Dec. 28. The last payments are being made last week and this week. If you’re collecting more than 26 weeks your benefits will end. It’s important to note: This is a federal decision. This is Washington, D.C. This is not Springfield.”

Workers suddenly dumped off unemployment can turn for help at to find a list of agencies that can provide options for food, housing and healthcare, Rivara said. Unemployment offices also will be able to provide list of contacts for help as well, he said.

Social service providers, however, are not necessarily bracing for a sudden influx of supplicants if Congress declines to extend benefits.

When asked if she anticipated a surge in animals put up for adoption, Illinois Valley Animal Rescue executive director Chris Ellberg said there’s no direct link between hard times and the volume of unwanted pets. Strays and abandoned pets show up at Ellberg’s doorstep in all seasons due to factors that transcend joblessness.

Similarly, the executive director of Public Action to Deliver Shelter said she wasn’t sure whether unemployment benefits would directly lead to referrals for shelter. That said, Carol Alcorn acknowledged a trickle-down effect that can lead to homelessness.

“When unemployment runs out, there’s no place left to go.”

For Adamson, unemployment threatens her dream of one day owning a home.

“When we were both working we were actually growing a bank account to buy our own home,” Adamson said. “Now that’s been put on hold because we had to tap into our savings to get by.”

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