CA extended unemployment benefits likely to be cut

People at the California unemployment office
July 16, 2013 12:00:00 AM PDT
California's economy is improving and overall, that's good news. But it could mean more hardship ahead for people who've been out of work for months. ABC7 News takes a look at why things are about to get worse for them.

The California economy is improving, construction jobs are rebounding, home prices are on the rise, and state tax revenue is $2 billion above forecast. However, if you go to your local Employment Development Office, the long-term unemployed say they haven't shared in the recovery.

"You can go out on the streets everyday and still see people looking for work, families not really having a place to stay. Truly, in my eyes, the economy is not getting too much better," said Elijah Moore, a job seeker.

The situation is about to get worse for them. Ten weeks of extended unemployment benefits will likely to be chopped off next month going from the maximum 73 weeks to 63, essentially eliminating what's called Tier 4.

This is not one of those situations where Congress can step in at the last minute and extend benefits. The cut is based on jobless statistics.

Looking at the unemployment rate, if California's three-month average falls below 9 percent, the federal government automatically stops funding the last 10 weeks of benefits. The numbers have been showing a steady decline. So much so, the state is on track to meet the three-month threshold when June's rate is announced this Friday.

"Tier 4 benefits became available, first payable in California back in February 2010. Since that time, we've paid out more than $3 billion in Tier 4 extension benefits. So it's been really critical sustenance for people, the long-term unemployed," said Loree Levy from the California Employment Development Department.

"Lawrence" didn't want to be identified, but the unemployed security guard is worried about what 10 fewer weeks of checks will mean for his family. He says he has six kids. He told us, "What shall we use to even eat? To transport ourselves to look for a job?"

For others, it means the clock is ticking.

"It definitely makes you put double-time on finding a job," said Elijah.

There's a slight hope here among the long-term unemployed, that Friday's numbers will show an up-tick in the jobless rate, so their additional 10 weeks will stay intact.


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