As states' insurance funds become insolvent, six states even decreased the amount of benefits available for the unemployed, to 20 weeks from the traditional 26. The biggest cuts came in the following states:
The cuts come as states' unemployment insurance funds face insolvency, and many are forced to borrow more and more money from the federal government. Still, they take away an important lifeline for unemployed workers, the law project says.
"It’s disconcerting that these lawmakers would expend so much energy making cuts to state unemployment insurance programs when more people are out of work for longer than any other period on record," said Christine Owens, executive director of the National Employment Law Project.
Some economists have argued that cutting off benefits motivates the unemployed to find work. But in many fields, there are dozens of applicants for each job.
As of the end of July, 30 states are borrowing $40 billion from the federal government to pay for unemployment insurance benefits, and must begin to pay interest on those loans beginning Sept. 30. California's loan balance stands at $8.6 billion. Only Colorado and Rhode Island have adopted measures to add funding to their programs to keep them solvent in the long run.
In June, California had 2.2 million unemployed workers, 728,000 of whom have been out of work for a year or more. In June 2010, 579,000 workers had been out of work for a year or more. The California Employment Development Department has paid $10.5 billion in benefits this year, and pays about $350 million a week. There are nearly half a million Californians who have run out of benefits completely.
-- Alana Semuels
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Photo: Rosemead job search center. Credit: Gary Friedman / Los Angeles Times
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