Surviving the expiration
Published 5:30 pm Saturday, December 18, 2010
This story was published in the Sunday, Dec. 13 print edition of The Austin Daily Herald
When federal unemployment benefit extensions expired at the end of November, thousands of Minnesotans realized, without another federal extension, they wouldn’t be provided with as much assistance as they may have initially thought.
While the Minnesota Department of Employment and Economic Development estimates that roughly 64,000 statewide people fell into that category, officials who work closely with the unemployed population in Mower County say it hasn’t been as much of an issue in Austin as other areas of the state and country.
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Mower County’s unemployment rates have steadily been lower than the state’s average. And there’s a reason for that.
According to Bob Haas, area manger for Workforce Development Incorporated in Austin, food manufacturing companies like Hormel and Quality Pork Processors have opened the doors to many who have found themselves collecting unemployment.
The Workforce Center in Austin has working relationships with many area businesses, including Hormel and QPP. Because of these relationships, and other training services provided at the Workforce Center, Haas said people regularly move on to accept employment within the community — before they have an opportunity for their benefits to run out.
Haas admits that not everyone goes on to work at Hormel and QPP, but he said the companies do help. The success of the food manufacturers also plays a role in the local economy, as those who are employed with such businesses are able to then go and patronize other grocery and retail outlets, among other businesses.
“If Hormel ever went away, we’d be hurting,” Haas said.
Other programs provided by the center are aimed at helping those who have been laid off acquire a new set of skills. Haas said this is especially an issue for those who have worked in a specific field for decades, only to find themselves out of work. In such situations, those collecting unemployment are also able to go through training classes to better their chances of landing a full-time job in a new career field.
Haas does admit the economic climate in Austin is healthier than others, but says there are some in the area who are affected by the extension expiration. Though the Workforce Center doesn’t collect specific figures for the county, Haas estimated that Mower County’s numbers would likely be lower than other areas in the state. DEED was not able to provide a breakdown of the 64,000 unemployed in Minnesota who would be affected by the extension cut-off.
What happened to the benefits?
Anyone who applied for unemployment benefits after Nov. 30, when the federal unemployment benefits expired, is only eligible to accept benefits for a maximum of 39 weeks. Before that, the maximum time a person could collect unemployment was 86 weeks.
While the decrease from 86 to 39 weeks may seem drastic, it’s really a step back to the way the system functioned pre-recession.
During the height of the recession in 2008, the federal government included an extension to unemployment benefits, known as Tier 1. This extension provided an additional 20 weeks to the standard unemployment benefits, which are available for 26 weeks. That extension allowed those whose unemployment benefits expired after 26 weeks to roll over into Tier 1 benefits where they could collect for an additional 20 weeks.
The extensions didn’t stop there.
In 2009, the federal government added two more tiers: Tier 2 and Tier 3. Additional benefits for Minnesota residents also kicked in during 2009.
Tier 2 benefits included an additional 14 weeks of unemployment. If that wasn’t enough, Tier 3 benefits rolled in, allowing those who hadn’t yet found a job to receive unemployment benefits for another 13 weeks. The last stop for those in the unemployed category was supplied through the state’s extended benefits, which were good for 13 weeks.
That brought the total amount of unemployment time up to 86 weeks — support given in an effort to boost the national and state economy.
When the extensions expired at the end of November, the three added tiers were essentially wiped out, leaving Minnesotans with the standard 26 weeks of unemployment benefits, in addition to the state-extended 13 weeks.
But that doesn’t mean that those who were categorized as collecting within a tier extension had their benefits cut off completely. Someone who had been in the third week of a 13-week federal extension would be allowed to collect through the extension, as long as they had entered that category before Nov. 30.
“It’s important for people to know that they won’t immediately, suddenly lose employment benefits,” said Monte Hanson, communications specialist with DEED. “People here who are qualified will get minimum of 13 weeks after transitioning out of categories.”
“They’ll finish off their tier and they’ll move to the final tier,” he said.
Where to go from here
This week, members of Congress debated on whether or not to once again extend benefits. While the issue is being given attention, President Obama on Thursday ran into roadblocks.
The issue of whether or not federal unemployment benefits will once again be extended, and if so, for how long, is still up for debate.
The bill that would extend unemployment benefits is tied to tax cut legislation, currently being debated in Congress.
With many House and Senate Republicans are signaling their approval of the tax cut plan, some House Democrats feel Obama went too far in yielding to Republicans’ demands for continued income tax cuts and lower estate taxes for the wealthy.
Obama said the compromise was necessary because Republicans were prepared to let everyone’s taxes rise and to block the extension of unemployment benefits for jobless Americans if they didn’t get much of what they wanted.
Economists say the recent recession officially ended in June 2009. But with unemployment at 9.8 percent, millions remain out of work or fearful of losing ground economically, and the notion of the nation falling back into a recession would strike many as chilling. It also could rattle markets and investors.
The Associated Press contributed to this report