More than 3,200 Mainers are losing unemployment insurance benefits on Saturday because Congress has not renewed legislation enacted during the Great Recession to protect the long-term unemployed.
As many as 18,000 additional Maine residents are in danger of losing unemployment benefits in the coming year if Congress does not pass an extension.
“A lot of people are scared right now,” said Ben Neveux, employment and training specialist with the Maine Department of Labor’s CareerCenter in Sanford. “It’s not an easy job to find a job.”
During the recession, Congress provided jobless benefits for as long as 99 weeks. That had been cut back to 73 weeks in some states, including Maine. But starting Saturday, anyone unemployed for longer than 26 weeks will receive no benefits. Nationally, the average duration of unemployment is 36 weeks.
Congress has extended or expanded federal aid to the long-term unemployed 11 times since the bill was originally passed in 2008, but there was no extension in the federal budget that President Obama signed Thursday.
Republican lawmakers objected to extending benefits without new mechanisms for funding the estimated $19 billion cost through 2014, according to the Congressional Budget Office. About 1.3 million people nationwide are losing extended unemployment benefits on Saturday.
The Maine counties with the most people affected are Cumberland (551), York (417) and Penobscot (377), according the U.S. House Ways and Means Committee. In Maine, the average weekly unemployment benefit in 2013 was $289, according to the White House Council of Economic Advisers.
A report issued by the council this month said people who have been unemployed for five weeks or less have a 1-in-3 chance of finding a job in a given month. The odds are only 1-in-10 for those who have been unemployed for more than a year.
“Companies want skilled workers,” said Neveux, at the CareerCenter in Sanford, and it is tough for the unemployed to crack today’s job market.
“The days of getting trained on the job are over,” he said. “Eighty percent of companies hire people referred to them by a trusted source. Getting 300 to 400 applicants for one job opening would not be uncommon in this day and age.”
Since 2008, a total of $225 billion in extended benefits has been paid to nearly 24 million people nationwide. About half of them have completed at least some portion of a college education, and 4.8 million have a bachelor’s or postgraduate degree, according to the White House Council of Economic Advisers.
“Long-term unemployment is not a blue-collar problem,” the council’s Betsey Stevenson said in a conference call with reporters Friday. “It’s all industries. It’s every age group. Any one of us could be in that position.”
Republican U.S. Sen. Susan Collins of Maine said, “I have supported extending this program in the past and would carefully consider any proposal to extend unemployment compensation beyond 26 weeks should it come before the full Senate. It should, however, be a priority of this administration and Congress to promote job retraining programs for these individuals to help them find work in areas where jobs are being created.”
Maine Sen. Angus King, an independent, said, “I intend to support an extension of the program because I believe doing otherwise would only needlessly hurt those Mainers who the program assists, and could also potentially set back an already fragile economic recovery.”
King expressed concerns, however, about the cost of the program, and said the expense must be addressed in any conversation about extending the benefits.
Democratic Rep. Chellie Pingree, who represents Maine’s 1st Congressional District, said, “The loss of unemployment benefits in the middle of winter is going to be very, very hard on a lot of families. … The economy has improved some, but it’s still hard for many Mainers to find a job that allows them to put food on the table and keep the heat on.”
Opponents of extending unemployment benefits have said the payments discourage people from looking for work.
“I don’t believe for a minute the argument that somehow unemployment benefits actually keep people from looking for jobs and somehow hurt the economy,” Pingree said. “It’s actually just the opposite, because unemployment checks get spent in the local economy – at grocery stores, gas stations and heating oil dealers.”
Maine’s unemployment rate fell to a seasonally adjusted 6.4 percent in November, its lowest level since November 2008 and less than the national rate of 7 percent. The federal Bureau of Labor Statistics estimated that 45,500 people were unemployed in Maine, down by 5,400 from November of last year.
Although the White House report projected that 18,100 long-term unemployed Mainers will lose benefits in 2014 without an extension, state officials said the number is closer to 10,000 or 11,000.
State Department of Labor spokeswoman Julie Rabinowitz said in an email that fewer people are filing for unemployment benefits, and those who do are averaging fewer than 15 weeks of claims, so the numbers won’t be as high as the White House forecasts.
“It is unfortunate that Congress timed this program to end in the midst of the holiday and winter heating seasons,” said Rabinowitz. “People who are struggling should visit their local CareerCenter for advice on job searches, but also, other state and local services that can help them get by as they get back on their feet.”
Jessica Hall can be contacted at 791-6316 or at: