Is any work better than no work? Not for unemployment benefits.
AP – In this Feb. 25, 2010 photo, Mercy Del Rosario of Chicago,
looks over her resume while attending a job …
New York –
Roberta Hanson of North Haven, Conn., had been searching for work for 22
months when she landed a part-time job weekend afternoons and nights
for a nearby municipal
parks and recreation department.
But now Ms. Hanson rues the day she took that work.
Why? The Connecticut
Department of Labor used her negligible earnings in her part-time
job as the new baseline for Hanson's unemployment
benefits. She went from receiving $483 a week to getting
nothing.
"Afterwards, unofficially, they said I shouldn’t have
taken the job," Hanson says.
It's a twist in the law that may affect thousands of
other workers, given that the ranks of the long-term unemployed are now
so high. Many people who have been out of work for a year are picking up
work as temps or part-timers, unaware that state agencies will
recalculate their unemployment benefits after a year – and use their
most recent work history and pay level to do it.
"What is going on for these workers is that because
their most recent wages are much lower than the wages they earned in
their prior full-time job, they are facing substantial cuts in their
weekly unemployment benefits," says George Wentworth, a consultant at
the National Employment Law Project (NELP) in New York.
Benefits recalculated after a year
Most of the people caught in this snag are on
Emergency Unemployment Compensation (EUC), a federal program to help
those who have exhausted their state benefits. However, after workers
have been jobless for 52 weeks, states are required to check to see if a
worker has requalified for state benefits. If someone is eligible for
state benefits – no matter how small – federal law requires that he or
she stop collecting EUC and go back onto state benefits. The states,
many with unemployment pools that are borrowing from the federal
government, are dramatically reducing the amount paid out to
individuals.
Mr. Wentworth cites the example of a Massachusetts
woman who had been getting $540 a week in unemployment benefits and,
when returned to state benefits, saw her weekly benefit cut to $103. To
make matters worse, her husband, also unemployed, saw his benefit drop
from $600 a week to $199 a week. Each cut came as a result of having
taken a short-term job.
Hanson’s situation is even worse. Connecticut's
formula for parttime workers is to take two-thirds of their gross salary (in her case
$130 a week, which is $87) and subtract that amount from $39, which
would be her weekly benefit based on the parttime job. This gives her a
negative $48, or no benefit at all.
“Something is wrong,” Hanson says. “I am allowed to
get nothing!”
Temp jobs on the rise
The potential reduction in benefits for parttimers
and temps comes as temp services are starting to hire more workers
because businesses don’t want to add fulltimers until they're sure the
economic recovery is permanent. In February, temporary help services
added 48,000 jobs, the US Bureau of Labor Statistics reported. Since
September, jobs at temp services have risen by 284,000.
In the 1990s, the last time America saw high
long-term unemployment among a sizable share of its work force, Congress
changed the law to prevent the unemployed from being penalized for
taking up parttime work. However, that change expired.
Now, Sen.
Jack Reed (D) of Rhode Island is sponsoring legislation to
accomplish the same thing today. Senator Reed attached his proposal to a bill
that extended several tax provisions, plus farm disaster assistance, unemployment
benefits, and COBRA health benefits.
“We need to incentivize people to find work, not
unfairly punish folks who were able to find short-term, temporary
employment,” said Reed in a statement.
However, the legislative package, which passed the
Senate on March 10, is in limbo because the House version is different.
Reed argues that his change could potentially help
states, because the long-term unemployed would receive benefits from the
US Treasury. Many state unemployment funds are now insolvent and have
had to borrow from the US government.
It could also help people like Hanson, who worked for
28 years for a Connecticut
social services program that was eliminated. She is trying to
support her elderly father as well as herself on her parttime job,
credit cards, and Social
Security. “I have written everyone from President Obama – from
whom I [have] heard nothing back – to my local representative [in
Congress], Rep. Rosa
DeLauro (D), who is very supportive,” she says.
