Unemployment Benefits on the Brink

By Beacon Staff

Losing a job can be difficult even under the best of circumstances. Recently, many Montanans have turned to unemployment benefits to help make ends meet after losing their paychecks.

This safety net, however, has begun to run out for those who lost their jobs early in this recession. After numerous benefit extensions, the end of September marked the exhaustion of unemployment benefits for more than 2,800 Montanans, according to the National Employment Law Project.

By the end of the year, that number is expected to top 5,600 if benefits are not extended.

The recession pummeled Flathead County, home to some of the highest unemployment numbers in the state and a stagnant job market. And though the federal government has said the recession may be over, Montana officials point out that any recovery has been a jobless one so far.

This does not bode well for the already unemployed, who have filed for unemployment insurance payments in large numbers in 2009, state officials said.

In Kalispell, Flathead Job Service manager Bill Nelson said some job seekers in the Flathead have expressed uncertainty and fear over the end of their benefit checks.

“They have no idea what they’re going to do,” Nelson said. “They’re feeling frustrated and probably scared going into winter with few job prospects.”

Congress is considering another benefit extension, but it is uncertain who would be covered. The House of Representatives passed legislation that would provide another 13 weeks of benefits for the 27 states with an unemployment rate of 8.5 percent or higher. But Montana would not qualify, with a 6.6 percent jobless rate.

That legislation is stuck in the Senate, bogged down by protests from the remaining 23 states with less than an 8.5 percent jobless rate.

Department of Labor and Industry Commissioner Keith Kelly said Montana is part of the group of states pushing for an amendment to allow all states to participate in the extension.

“It makes more sense and it’s more cost-effective,” Kelly said.

U.S. Sen. Max Baucus introduced extension legislation that would cover all states for four weeks, and also give the 27 states with high unemployment numbers an extra 13 weeks. The Senate is expected to debate and possibly pass some form of the legislation this week.

If the benefits are allowed to run out, more people will be placed on state and federal welfare programs, which would cost considerably more, Kelly said.

The recession hurt many of the biggest employers in the Flathead, prompting lay-offs and hiring freezes. Actively searching for a job is a requirement for those on unemployment benefits, but it can prove difficult with scores of people turning out for a single opening.

Nelson said the Job Service center has been bustling since the beginning of the recession, but the outlook is grim for many job seekers. With an 8.7 percent unemployment rate in Flathead County in August, Nelson said about 4,400 people in the area are on unemployment insurance or are unemployed.

The Job Service would typically have about 300 or 400 openings at this time of year, Nelson said.

“We only have 70 right now,” Nelson said.

The U.S. Department of Labor estimates that five or six people are applying for every open job, but Nelson said he sees higher numbers locally. For example, he said roughly 150 people expressed interest in an opening for a bar janitor, while an administrative job opening with the county garnered more than 400 applications.

When not in a recession, unemployed Montanans can apply for 28 weeks of benefits paid for by the state’s unemployment insurance fund, Kelly said.

If a resident still can’t find a job after 28 weeks, another 20 weeks of benefits are available at a cost split between the state and the federal government. But as unemployment numbers climbed this year, Montana qualified for 13 weeks of extended benefits twice, followed by another seven-week addition, Kelly said.

The latest extensions were funded solely by the federal government, along with an additional $25 a week for benefit recipients from stimulus funds.

In Montana, the total number of people to file for regular unemployment benefits so far in 2009 is 69,508, according to information from the state Unemployment Insurance Division, a jump of more than 77 percent from the 2008 numbers. The average weekly unemployment insurance payout in 2008 in Montana was $214.

Nationally, more than 6 million people have lost their jobs during the recession and unemployment is currently at 9.8 percent, with expectations of reaching 10 percent in the next few months. At the end of September, an estimated 400,000 people were expected to exhaust their unemployment benefits. That number is expected to triple by the end of the year without congressional intervention.

In the latest reports from the U.S. Department of Labor, the average job search takes 26.2 weeks, while the unemployment benefits in most states only last for 26 weeks.

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