Jobless pain due to peak in new year without relief
Thousands of Mainers could exhaust unemployment benefits by year's end unless Congress passes another extension.
By ANN S. KIM, Staff Writer
September 24, 2009
Hundreds of jobless Mainers stand to exhaust their unemployment benefits in each of the coming weeks, and the weekly numbers could jump into the thousands by the end of this year, according to projections by the state Department of Labor.
In August, 389 Mainers ran out of benefits. Hundreds more will use up their benefits each week until the end of December.
But the real crush will occur at the beginning of the year when federal extensions expire for thousands of unemployed. According to the department's projections, 2,778 Mainers will exhaust their allotted payments in the week ending Jan. 2 and 5,986 will run out the next week.
Congressional action may provide some relief. The U.S. House has passed a bill to provide an additional 13 weeks of unemployment benefits for people in states with high unemployment rates.
The measure passed 331-83 on Tuesday, with Maine's Democratic Reps. Mike Michaud and Chellie Pingree voting with the majority.
Maine is among the 27 states, along with the District of Columbia and Puerto Rico, that would qualify. Maine's unemployment rate was 8.6 percent in August.
Labor Commissioner Laura Fortman said Wednesday that the extension is "absolutely essential" in Maine.
"These are folks who are doing everything they can," she said. "They're playing by the rules, they're looking for work, they're participating in job searches. They're taking every step they know how to secure employment, and they are still unable to do that."
Higher rates of foreclosures and homelessness can be expected without the support of unemployment benefits, Fortman said.
Unemployment benefits are helping to stabilize the lives of jobless Mainers and their families, as well as their communities, she said.
The state's regular unemployment program offers as many as 26 weeks of benefits. Because of federal extensions, eligible unemployed workers in Maine can now collect benefits for as long as 79 weeks.
The maximum payment is $356 a week, with an additional $10 per dependent, before taxes. Most people who receive unemployment benefits are also eligible for an additional $25 a week from the federal stimulus.
High unemployment rates in Maine prompted three extensions of benefits in the state by the federal government.
In the week ending Sept. 12, the state got 1,893 new unemployment claims, up from 1,532 in the same week the year before. Ongoing cases totaled 26,085, compared with 13,042 a year ago.
The number of workers collecting benefits represents only about a third of the Mainers who are unemployed, said Dana Evans, an economist in the Department of Labor.
Some are ineligible because, for example, they are self-employed or new to the labor market, their earnings were insufficient before they became unemployed, or they worked in a business that operates fewer than 26 weeks in a year.
More than $55.5 million in federally funded unemployment benefits have been paid in Maine since the passage of the economic stimulus package in February, according to the National Employment Law Project.
The New York-based advocacy and research organization says that 400,000 people nationally will exhaust their benefits by the end of this month and 1.4 million will run out by the end of this year.
Although some economists believe the nation is likely pulling out of the recession, improvement in the job market is expected to lag.
The recession is expected to cost Maine as many as 33,000 jobs before an anticipated job market recovery in the third quarter of 2010, according to the most recent report by the state Consensus Economic Forecasting Commission.
Regardless of what economists say, businesses are going to be cautious about hiring, said Michael Donihue, an economist at Colby College and a commission member.
Even when companies start seeing more business, they will likely increase the hours of the workers they have before making any hires, he said.
"The length of this recession is longer than any since the Great Depression," Donihue said. "That's going to make firms less likely to hire quickly."
Staff Writer Ann S. Kim can be contacted at 791-6383 or at:
akim@pressherald.com