Congressional gridlock threatens benefits for 12,000 jobless in Minn.by Annie Baxter, Minnesota Public Radio
ST. PAUL, Minn. — About 12,000 Minnesotans seem certain to lose their unemployment benefits next week if Congress fails to act.
Since putting the extended benefits for jobless people into effect in 2008 during the Great Recession, Congress has acted 10 times to keep them.
But without further action this time around, the extensions will end Saturday.
"That is the hard cut-off point, and this week would be the final week for those on the extended benefit package to receive a check," said Katie Clark Sieben, commissioner of the Minnesota Department of Employment and Economic Development.
Under current law, Minnesotans can draw up to 40 weeks of unemployment benefits, less than half as many as at the peak of the recession.
Without congressional action, the benefit package will shrink to 26 weeks, its pre-recession size. It is only coincidence that deadline is close to the larger budget and tax debate between the White House and Congress. But President Barack Obama is trying to insert the benefit extensions into fiscal cliff talks.
The National Employment Law Project estimates that 1 million workers nationwide will be dumped from extended benefit rolls.
In Minnesota, 12,000 people will be cut off, Clark Sieben said. Her office has been reaching out to them since November.
Hundreds of jobless workers recently showed up at a networking party for the unemployed at Grace Church in Eden Prairie.
Susan Angell of Shakopee scanned the crowded room looking for people who could connect her to work. Angell lost her job as an optical lab tech in May.
"There's just not a lot out there for that right now," she said.
At 28, Angell is hoping to change careers and recently completed some training in information technology.
She still needs to take a certification test, and she was chagrined to learn that she cannot rely on extended unemployment benefits during her test preparation.
Her husband has a job, but she says her family will struggle without her weekly unemployment check of $385.
Given the budget stalemate in Washington, Angell might need to skip studying for the IT certification and just look for any job.
"It's getting a little scary," she said. "My unemployment will be done and we have three kids at home. So it's getting a little more serious."
Unemployment insurance typically pays half a worker's weekly wage.
Conservative critics of extending jobless benefits often argue that government checks make the unemployed less likely to look for work.
Henry Farber, a Princeton University labor market economist, said in a strong economy, jobless benefits can create a disincentive to finding employment. People become complacent about their job search when they can get paid not to work.
But Farber says those disincentives are absent in the current economy.
"In weak labor markets, particularly at the depths of the Great Recession and even in the slow recovery, the evidence we've seen is that what happens is the real problem is that there aren't jobs out there, not that people aren't looking."
Given this situation, Farber said he believes Congress should re-up the benefit extensions.
"Long-term unemployment is more severe than it's been in many, many years, and as a result there are many people out there who've been unemployed a very long time and who don't have income support right now, which I think is very important."
Even if no action is taken now, Congress could retroactively restore the extended benefits, which has happened twice before.
- All Things Considered, 12/28/2012, 5:20 p.m.