For many jobless, pressure's on

400,000 Californians could lose their extended benefits

mrowland@modbee.comand MIKE NORTH
mnorth@mercedsunstar.com
December 8, 2012 

— As a single father with two kids, life just got a little more challenging for Darrick Brown.

Brown, a 46-year-old Merced resident, left his trucking job in Texas and came back to California for family reasons, but he's finding the local job market to be a challenge.

And now that his federally extended unemployment benefits are coming to an abrupt end, the pressure's on.

"Since I have no other income, it will impact my lifestyle pretty hard," Brown said. "It's how I pay rent and buy food and clothe my kids."

The extensions have proven a lifeline for many people as the economy in the Central Valley slowly recovers. In Merced County, the unemployment rate of 14.7 percent continues to outpace both the national and state rates. During the peak of the Great Recession, the jobless rate topped 20 percent in the area.

In Merced County, about 3,200 residents are slated to lose their federal benefits Dec. 29, when the extensions are set to expire. The number is almost half the some 13,100 county residents receiving benefits as of September. In neighboring San Joaquin County, more than 8,500 people will fall off the rolls, and in Stanislaus County, more than 6,300 will be cut off.

Overall, an estimated 2 million jobless Americans could be affected.

Congress could vote to extend the benefits, but so far, there is little movement on the issue as the contentious "fiscal cliff" talks continue in the Capitol.

Michelle Allison, program manager at the Merced office of Worknet of Merced County, said she's hopeful the benefits will be extended by Congress.

"I think they will," she said. "I think they recognize that this is not a time to play politics and that people's lives are really depending upon these few dollars that they're receiving."

Jackie Walther-Parnell, operations officer for Merced County's Department of Workforce Investment, said unemployed people are facing a lot of ambiguity right now.

"One of the biggest things is the uncertainty of it," Walther-Parnell said.

Unfortunately, when people lose their unemployment benefits, their focus shifts from finding long-term, permanent solutions to finding immediate money just to get themselves to the next week, Allison said.

"It transitions back to the right now," she said.

While the Merced area hit hard times with unemployment and foreclosures, Allison said many people are starting to get back on their feet, but losing the federally extended unemployment benefits would undercut that effort for some.

As the area's work force investment board, Worknet helps those looking for employment with resources and retraining. The state's Employment Development Department, which administers the benefits, has been notifying all recipients about the impending federal unemployment cutoff.

The EDD says 346,300 Californians are getting the extra payments. By year's end, EDD expects nearly 400,000 will qualify for the extended federal benefits.

Catalina Martinez, a public information officer with the EDD, said the department has been providing resources and information to people about what to do when their unemployment runs out. Those who qualify could receive public assistance such as food stamps and Medi-Cal.

"It's something that we're not happy to do. It's unfortunate and we know how critical this help is for them," she said. "This is a bad time of year for this. We really want to get the word out and hope Congress makes a decision soon."

Since July 2008, the federal extensions, which have expired and been re-extended several times, have put $40 billion into the hands of the state's long-term jobless. At one time, Californians could qualify for 99 weeks total, but in May of this year, that was dropped to 73 weeks because of improvements to the state's unemployment rate.

State and federal unemployment benefits are identical, anywhere from $40 to $450 a week, depending on a worker's recent quarterly wages.

Between state and federal extension benefits, the EDD has paid $17.1 billion in benefits to Californians in 2011 and $9.3 billion up to August of this year. The EDD reports that it pays about $284 million a week.

But since the recession began, close to 900,000 Californians have run out of all available benefits, both state and federal.

Last month, the nonpartisan Congressional Budget Office released a report that said extending the current federal benefits through next year would add the equivalent of 300,000 jobs by boosting spending and growth in 2013.

The CBO report said the current extended federal benefits would cost about $30 billion and increase gross domestic product by 0.2 percent by the fourth quarter of 2013. The increase in demand for goods and services created by the unemployed having money to spend would account for about 300,000 full-time jobs.

Gabriel Orozco, a 36-year-old Merced resident, said unemployment benefits are just enough to keep people afloat, but they go a long way toward helping people improve their livelihoods.

Orozco lost his job about a year and a half ago before starting up a day care, which also went under. For a while, he was relying on unemployment benefits. Now, he's draining his 401(k).

"Unemployment is really just the bare minimum getting you by," he said. "It would be good just to have it until you can find something permanent or steady or long term."

Through his job searches, Orozco's had a hard time finding full-time, permanent positions.

"It's hard to find any permanent positions right now," Orozco said. "If you look on most of the sites, they're either substitute positions, interim positions or part-time positions."

Because of the slow job market, Orozco's done what he can to conserve his money.

"I've cut back on a lot of expenses -- eating out, going out to the movies and stuff like that," Orozco said. "A lot of little things that I probably would've done on top of regular day activities, I've cut them out just to save on gas and to save my money to pay whatever bills I do have, such as rent and lights and all that."

Considering the poor local economy, Orozco thinks the benefits should be extended to allow unemployed people more time to get back on their feet.

"I have two degrees -- one in psychology and one in sociology, both an AA and an AS, but I haven't been able to find any jobs," said Orozco, who puts in 15 applications or more a week.

Orozco hasn't ruled out leaving Merced County for Santa Clara in search of more job opportunities.

"I have a little bit of money left from my old 401(k), but that's probably going to run out in the next couple of months," he said. "It's a lot of pressure right now to try and get something steady."

Brown is facing much of the same pressure.

He does have experience in various fields, such as working with security equipment, but he said the local job market is saturated and getting into it is a challenge.

To improve his chances of finding a job where he could come home at night to take care of his kids, Brown went through vocational training in accounting.

But he got a letter a week and a half ago informing him that his federally extended unemployment benefits, which were supposed to last until Feb. 13, would expire at the end of the month.

He was getting $450 a week, which he used to support himself and his two kids.

Brown was hoping to use his additional time to search for an accounting job, but now he has to race to find some immediate work to support his family.

"Right now, I don't know what my next option would be," he said.

Bee staff writer Marijke Rowland can be reached at mrowland@modbee.com or (209) 578-2284. Follow her on www.twitter.com/turlocknow.

Reporter Mike North can be reached at (209) 385-2453 or mnorth@mercedsunstar.com.

How it works

Before the recession, most Californians were eligible for a maximum 26 weeks of state unemployment benefits, paid by their employer.

In June 2008, Congress began federal extensions that gave unemployed workers a maximum 73 additional weeks (99 weeks total) of benefits to help during the recession.

In May of this year, the number of federal extensions for which Californians were eligible dropped because of improvements to the state's jobless rate, so they could receive only up to 73 weeks total (between state and federal) of benefits.

On Dec. 29, all of the federal benefits are set to expire nationwide, and everyone eligible or receiving extensions would have their payments stopped on that date.

Congress could vote to approve another extension of the federal benefits as part of its ongoing "fiscal cliff" negotiations.

Some 920,000 people qualify for benefits in California and some 400,000 would lose their benefits when the federal extensions expire.

Some $284 million a week in unemployment is paid to Californians between state and federal benefits.

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