Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘ARRA’

On the Path to Economic Recovery: Extended Unemployment Benefits

Monday, October 19th, 2009

Image: Courney ChappellAlthough it is encouraging to see that the Dow Jones Industrial Index hit 10,000 this week, unemployment in this country continues to look bleak.  The September national unemployment rate shot up to 9.8%, and a record 5 million people have been unemployed for six months or longer.  These workers are now competing for a very limited number of available jobs, a ratio of 1 to 6.  If the Dow is in fact a reliable indicator of an economic rebound, why hasn’t the unemployment rate followed suit and leveled out or decreased?  Economists predict that unemployment will continue to remain high throughout 2010 – and even 2011 – at which time we will see more promising signs of recovery.  Until then, however, according to the National Employment Law Project (NELP), an estimated 1.4 million jobless workers will lose their unemployment benefits by the end of 2009.

The purpose of the unemployment insurance (UI) system is to prevent workers who lose their jobs through no fault of their own from slipping into poverty.  By temporarily filling the income gap for families while they search for work, UI serves as a critically important safety net.  Although the weekly benefit amount generally replaces only about one-third of a worker’s weekly earning, those checks can stabilize a household and help families cover their basic needs.

Congress is currently debating legislation that will extend benefits to workers who are struggling during this economic downturn.  Last month, the House passed a bill that would extend UI by 13 weeks, but it would apply only to those jobless workers who live in states with unemployment rates higher than 8.5%.  The Senate has likewise introduced legislation, but it is broader in scope.  The Senate bill would provide 14-20 weeks of additional benefits to jobless workers in all states.  Although advocates originally expected the bill to pass the Senate rather quickly, opposition has been raised regarding how these additional weeks will be paid, ultimately stalling any movement.

Any extension of benefits will no doubt help jobless workers in D.C.  The city’s unemployment rate is over 11%, and even higher in Wards 7 (19%) and 8 (27%), two of the city’s poorest neighborhoods.  According to NELP, by the end of 2009, approximately 4,700 District workers will have exhausted their federal extensions.

The D.C. Employment Justice Center, in collaboration with its community partners, has been working to ensure that all available stimulus money under the American Recovery and Reinvestment Act (ARRA) will make its way into the pockets of District workers.  Specifically, D.C. is entitled to receive $27 million of federal funding as incentive payment for modernizing its UI system.  Because the District adopted the alternative base period (ABP) in 2002, it has already received $9 million of this funding from the Department of Labor.  In order for the District to qualify for the remaining incentive payments, it must implement, at a minimum, two additional reforms and submit a second application to the Department by August 22, 2011.  Emergency legislation was introduced and passed in July 2009 that included two such reforms: a dependent allowance and an extension of UI to those enrolled in approved training.

Permanent legislation must still be passed in order for D.C. to receive the remaining stimulus funding.  But even this will not be enough.  In order to address the record rate of joblessness, the significant percentage of workers exhausting benefits, and the inadequate weekly benefit amount, evidenced by the fact that over 50% of UI recipients receive the maximum amount, the District must maximize the scope and impact of the $27 million federal funding to which it is entitled.  It can do so by also increasing the maximum weekly benefit amount by $20; expanding eligibility to those who leave their jobs to care for a sick family member or to relocate with their spouse/domestic partner; and extending the time in which an individual may file an appeal if he/she is denied UI.  These changes will help thousands of District workers and families as they continue to look for long-term employment.  Specifically, $10 million will make its way into the pockets of approximately 22,000 struggling workers.

If the federal government steps in to extend benefits for an additional 14-20 weeks under the Senate bill, all of the District’s reforms could be funded with stimulus money for 2 ½ years, and employer taxes would not increase.  Other states are no doubt in a similar situation – with the federal government footing the bill for up to 20 extra weeks, states can maximize the impact of their stimulus funding by changing their UI programs beyond the minimum requirements prescribed by the Department of Labor, and thereby provide much needed relief to their residents.  Two and a half years is a significant amount of time to feel the impact of the ARRA and create real economic opportunities for struggling communities.

With more money in the hands of consumers, more dollars will circulate throughout the economy, the stock market will continue to steadily rise, employers will regain their confidence, and the unemployment rate should eventually fall.  Congress’ decision to provide extended unemployment benefits is a critical step in helping the economy rebound, and will help ensure that the Dow’s resurgence this week is a truly promising long-term sign of the nation’s recovery, rather than a single snapshot of Wall Street.

About the Author: Courtney Chappell is the Advocacy Manager at EJC.  Prior to joining EJC, she was an associate at James & Hoffman, P.C., where she represented unions and individual employees in all matters relating to labor and employment law. As the first Policy & Programs Director at the National Asian Pacific American Women’s Forum, Courtney spearheaded the organization’s reproductive justice program and developed a multi-pronged action agenda that included lobbying, grassroots organizing, and public education campaigns.  Her achievements included coordinating a national lobby day relating to immigration reform, and convening a national coalition of women’s rights, immigrant rights, and reproductive rights organizations to focus on the intersection of health care and immigration.  She similarly engaged in policy advocacy as a fellow at the Mexican American Legal Defense and Educational Fund after graduating from law school. Courtney graduated magna cum laude from the American University Washington College of Law, where she was a student attorney in the domestic violence clinic and interned for the U.S. Department of Justice, Civil Rights Division, the EEOC, and the ACLU. She was also a staff member of the American University Law Review and volunteer intake counselor at the Asian Pacific American Legal Resource Center and the Domestic Violence Intake Center.  Courtney has served on the boards of the Third Wave Foundation and the Asian/Pacific Islander Domestic Violence Resource Project.  She is a recipient of a New Voices Fellowship and a Georgetown Women’s Law and Public Policy Fellowship.

COBRA's High Cost Bites Into Jobless Safety Net

Monday, June 22nd, 2009

As unemployment rises more women are turning to COBRA for health insurance coverage, but discovering it’s either too expensive or not available. Women who shop for individual insurance often face higher rates due to “gender rating,” a recent study found.

COBRA American Recovery and Investment Act

(WOMENSENEWS)–When Jane Schiffler loses her job on July 1, the college administrator will face tough choices.

“To help make ends meet for me and my 7-year-old son, I’ve decided to give up our land line and just use a cell phone; to cancel our cable TV and just get the basic channels; to go to the library instead of buying books; and to cook at home instead of eating out,” says Schiffler, a single mother in New York City. “But I haven’t figured out what to do about our health insurance coverage, which remains my biggest–and most frightening–challenge.”

Schiffler qualifies for COBRA, the Consolidated Omnibus Budget Reconciliation Act.

The 1985 law allows laid-off workers and their dependents to remain on their former employer’s group health plans for 18 months as long as they pay the same amount for coverage as their employer did, and 150 percent of that amount if they extend COBRA coverage beyond 18 months.

“The problem is that COBRA is just too expensive for me to afford,” says Schiffler, who is using a pseudonym in this article because she doesn’t want her concerns about health coverage–and the fact that she may have to do without it at some point–to negatively impact her job search or her chances of getting health coverage in the future.

The average monthly unemployment payment in the United States is $1,278.

COBRA for an individual consumes 30 percent of that. Family coverage devours 84 percent.

Little Left Over

That leaves many laid-off workers with little left for rent, mortgage, utilities, groceries, and other necessities, found a January 2009 report from the Washington-based Families USA.

In February, the federal government moved to help such workers by passing the American Recovery and Reinvestment Act of 2009 (ARRA), which provides $25 billion in temporary subsidies so workers who were involuntarily terminated between Sept. 1, 2008 and Dec. 31, 2009 pay 35 percent of the normal cost of COBRA.

“While this is a significant subsidy, for the average woman, it’s still more than the 16 percent of the cost of individual coverage or the 27 percent of the cost of family coverage that she would have paid as her contribution to health insurance while she was still working,” says Karyn Schwartz, a senior policy analyst for the Kaiser Family Foundation, based in Menlo Park, Calif.

Many unemployed women, meanwhile, don’t qualify for COBRA.

Ineligible are laid-off women with individual incomes of more than $125,000; family incomes of more than $250,000; employers who never offered health insurance in the first place, and employers who went out of business (and therefore had no health plan at the time of job termination).

10 States Lack ‘Mini Cobra’ Laws

“Company size is also barrier to coverage,” says Cheryl Fish-Parcham, deputy director of health policy for Families USA. “COBRA only applies to workers in companies with 20 or more full-time employees. Some states are working to help laid-off people from smaller firms. But in 10 states, there are still no ‘mini COBRA’ laws creating coverage for these laid-off workers, who now have to go without coverage, or pay high premiums for individual plans.”

The average private health insurance plan for an individual costs $4,704, while one for a family costs $12,680, according to a March study in the New England Journal of Medicine. And due to a practice known as “gender rating,” most private insurers charge women more than they charge men, according to a 2008 report by the Washington-based National Women’s Law Center.

“I can only afford COBRA for a few months, and I definitely can’t afford to buy private coverage,” says Schiffler. “If my savings run out, I may have to go without coverage, though my son may qualify for a state program for children. I need a safety net, but if I have to choose between eating and buying health insurance, I am going to eat.”

About the Author: Molly M. Ginty is a freelance reporter based in New York City. A graduate of Columbia University’s Graduate School of Journalism, she has written for Ms., Marie Claire, Good Housekeeping, Redbook, Ladies’ Home Journal, pbs.org and On Earth as well as Women’s eNews.

This article originally appeared in Women’s eNews on June 18, 2009. Re-printed with permission by the author.

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