A tax cut or rent? For unemployed it's a no-brainer
"The House Republican leadership continues
to tie it to its economic stimulus package of tax cuts for corporations
and the wealthy - something the Senate isn't likely to approve."
By Amanda Paulson | Staff writer of The Christian Science Monitor
Alan Singletary isn't quite sure how he'll pay next month's rent - a
bewildering predicament for a middle-aged wage earner used to
middle-class security.
An early victim of the recession, the former assistant manager at a
Philadelphia Cinnabon was laid off a year ago. He had years of
restaurant management experience, and started his job hunt
optimistically. His monthly $1,578 unemployment-insurance benefits
were plenty to tide him over. But in October, after applying for nearly
500 jobs, his 26 weeks of unemployment benefits ended. Now, he's
on public assistance and wondering just how far this downward spiral
can go.
Hundreds of thousands of Americans are
pondering the same question as effects of
the recession overtake social safety nets,
and a hoped-for extension of unemployment
benefits languishes in Congress.
By June, an estimated 2 million Americans
will exhaust their unemployment benefits.
More than 1 million have already exhausted
them. Their comfortable lives are quickly
reduced to a quick financial equation,
summed up by Mr. Singletary this way: "I
can pay to keep the gas and electricity on,
but who can pay the rent when you only get
$205 a month?"
In past recessions, Congress has always
come to the rescue, softening the hard
knocks by extending unemployment
insurance (UI) for 13 or 26 weeks. In the
severe 1975-76 recession, it was extended
by 39 weeks.
Extensions are a political plus for everyone,
and they usually have wide bipartisan
support on Capitol Hill. In theory, the current situation is no exception
- a 13-week extension has already passed, unanimously in the
Senate. But, in practice, the House Republican leadership continues
to tie it to its economic stimulus package of tax cuts for corporations
and the wealthy - something the Senate isn't likely to approve.
The House Republicans reason that without the stimulus package
and a healthcare component, the extensions of individual benefits
won't do much, says Christin Tinsworth, a spokesperson for the
House Ways and Means Committee.
Politics vs. next month's rent
But the wrangling translates into desperate circumstances for the
jobless.
"[GOP leaders] know that without holding these workers hostage to
the tax cuts, they won't get them," says John Dodds, director of the
Philadelphia Unemployment Project. "Everybody's for [the extension],
but we can't get it passed."
Each week, 80,000 workers exhaust their UI, according to the Center
on Budget and Policy Priorities.
They are people like Judy Conway, a bilingual program director in
New York, who has 14 years of management experience. Her
unemployment ran out in early December, and she's been forced to
borrow nearly $20,000 from her family. Even if she lands a job soon,
she's not quite sure how she'll pay it all back.
Rose Hutchinson, another New Yorker, was getting final approval for
a mortgage when she was laid off from her job as a sales coordinator
at Circle Line Tours. Now, she and her two-year-old son are living
with her mother, trying to get by on her last few weeks of UI.
The unemployed include low-end service workers, top Wall Street
executives, travel-industry workers hit hard by Sept. 11, and maybe a
few more dot-commers and young professionals than in past
recessions. But for all, options are limited once their UI is exhausted.
Public assistance may be available to the neediest, but not for
anyone with even slim resources, and, in many states, not unless
they have dependents. The fortunate can live off their savings. Most
people have to turn to their families, rack up huge credit-card debt, or
sell assets, such as cars, says Rick McHugh, a staff attorney at the
New York-based National Employment Law Project, a nonprofit
advocacy group. "It quickly becomes very grim, because most people
don't have a lot of weeks of salary set away. And if they've already
been unemployed for 26 weeks, they've most likely used those up."
Unemployment insurance is an employer-funded program started in
1935. Eligibility and benefits vary by state, and depend on how long
recipients have worked, how much they earned, and the reason
they're out of a job. A worker who voluntarily quits isn't eligible; nor
are independent contractors or the self-employed. Typically benefits
are 50 percent of former wages, up to a certain maximum.
When 26 weeks won't suffice
Theoretically, UI is an insurance mechanism to cover basic expenses
until those who are unexpectedly out of work can find another job.
But as the job market tightens during a recession, 26 weeks isn't
enough for many, despite vigorous searches.
Suzie Brown, an experienced and well-connected product manager in
Denver, figured she'd have no trouble landing another job after Qwest
laid her off in October. She instantly started networking, and says
she had internal contacts in about half of the companies where she
looked for work. Still, after applying for 300 jobs, she can count on
one hand the number of replies she received. "The three or four calls
I've gotten in a period of four months said, 'I picked your résumé from
over 800 we received in three days,' " she says with a discouraged
laugh.
Others tell similar stories: Years of top experience count for little;
hundreds of applications yield a few rejection notices.
Steve, a New Yorker who asked that his last name not be used, was
laid off in June from his job as a computer-support specialist for an
online publication. He found another job briefly in early September
when he still felt he could be picky. The company didn't appeal to
him, so he turned down the offer. He says he'd accept it in a minute
now.
"The last time I looked for a job [in 2000] - from the time I started to
look to the day I signed the contract took seven days," he says.
"Now, [your résumé] goes out into the vacuum and you hear
nothing," he says.
csmonitor.com |
