Tuesday 13 December 2011

New unemployment, benefits could hit New Jersey hard

WASHINGTON - Hours before leaving for Capitol Hill, U.S. Rep. Bill Pascrell, Jr. (D-NJ-8) visited the Passaic County Workforce Development Center to speak with job seekers and reiterate the message that no Congress members should return home without extending unemployment insurance (UI) benefits and this year's payroll tax cut.


"We know that times are tough out there. Many people lost their jobs as a result of the economic crisis and while the economy is improving, it's clear we're still not growing fast enough to create a job for everyone who needs one," said Pascrell, a former Paterson mayor who serves on the House Ways and Means Committee and House Budget Committee.


"There are some people in Washington who would characterize the unemployed folks here as lazy. They say that they are living large off of the critical unemployment benefits we've provided," Pascrell said. "As we can see here today, nothing could be further from the truth. People come to one-stop centers like this one throughout New Jersey to do everything they can to improve their chances of getting job. Right here in this building, people take ESL classes, brush up their interviewing skills and meet with career counselors. It's part of the deal in receiving unemployment benefits. No one can simply get the benefits and go home. A person needs to be looking for work."


As Congress resumes it business this week, a number of provisions benefitting job seekers and the middle class, including unemployment insurance, are due to expire by the end of the month.


Failure to extend UI benefits would affect 60,000 people statewide by the end of January, and up to 100,000 people by the middle of 2012.


If that seems counterintuitive - that the state in the region with the worst unemployment would stand to lose the most benefits - it's because six weeks of benefits for high-unemployment states such as New Jersey, with its 9.1 percent unemployment rate, would be phased out starting Jan. 1.


Pennsylvania, at 8.1 percent, and Delaware, at 7.9 percent, have been doing better and have not qualified for those six weeks.


If the GOP-sponsored legislation becomes law, the jobless in all three states would receive 59 weeks of benefits, down from 99 weeks in New Jersey and 93 weeks in Pennsylvania and Delaware.


The proposed change is part of the politically charged bundle of legislation in Washington that includes continuing the payroll-tax break, payments for doctors, and changes in environmental regulations.


With that kind of amalgamation, everything is in play.


With 13.3 million unemployed, most agree that some federally funded benefits should continue. The dispute is over how benefits should be funded and for how long.


Those who favor the current structure say benefits help the families of the unemployed and stimulate the economy, since the cash-strapped jobless spend every dime they get.


Besides the cost, those who want to shorten benefits say long benefits discourage workers from more quickly making hard, but necessary, decisions such as switching careers or moving to regions with available jobs.


States pay for the first round of benefits, usually 26 weeks.


During the recession and its aftermath, Congress passed legislation funding an additional 73 weeks, broken up into several segments. The legislation, proposed by House Republicans, would remove three segments, for a total of 40 weeks, leaving 26 weeks of state benefits and 33 weeks of federal benefits, or 59 weeks in total.


Two segments, for a total of 20 weeks, would be removed outright. These segments include the six weeks now available in high-unemployment states such as New Jersey.


States would phase out of the other 20 weeks of benefits in the spring, with the precise timing depending on calculations involving their employment situations.


This calculation particularly hurts states such as New Jersey, where the unemployment rate has fallen slightly but remains stalled in a tough spot. New Jersey's unemployment rate has been at or above 9 percent since May 2009 but is down from its 9.8 percent peak in January 2010. At the start of the recession, New Jersey's unemployment rate was 4.5 percent.

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