Nebraskans battle emergency unemployment compensation loss
January 9th, 2014
Omaha, NE — Nebraskans may be able to breathe a sigh of relief if Congress decides to extend unemployment benefits for the long-term unemployed.
If the bill passes, an estimated $6.5 billion in benefits will be provided for an additional three months to 1.3 million unemployed Americans who recently lost benefits.
Before the December 28 expiration, approximately 3,000 Nebraskans received emergency unemployment compensation, according to Catherine Lang, commissioner of labor and the director of economic development for the state of Nebraska.
She said the Nebraska Department of Labor aims to help the long-term unemployed find work.
“Generally the workforce in Nebraska is very strong and has been strong through the recession,” Lang said. “There are a group of people who would be considered long term unemployed. For those individuals one of the things we would hope to assist them with is to find work in the Nebraska economy.”
Nebraska has the third lowest unemployment rate in the country, according to the Bureau of Labor Statistics. But Dr. Donald Baum, chair of the economics department at the University of Nebraska at Omaha, said although Nebraska hasn’t fared as badly as other states, not extending benefits will still bruise families and the economy.
“It’s going to hurt people and push them into poverty. It’s going to lower total spending which will create a little bit more unemployment and hurt businesses, particularly in areas of high long term unemployment,” Baum said.
Baum said the nation’s current unemployment rate of 7 percent is still relatively high although it’s the lowest it’s been since December 2008.
“You‘ve still got three applicants for every open position. The number of unemployed is three times as large as the number of open positions. The national economy has been getting better, but it still has a way to go,” Baum said.
Dan Tomasello recently found himself unemployed and collecting unemployment benefits after being laid off for the second time in his professional career. The 28-year-old Omaha native received emergency unemployment compensation in 2011 and 2012 after his sales division was terminated.
At the time he received about $300 a week in benefits. Nebraska’s maximum benefit in 2013 was $362 a week, but the average benefit paid amounted to $238 a week.
“I kind of felt like when there was an extension, it showed how bad the economy still was from the recession of 2008. It seemed like the government felt obligated to have an extension to help all of these people who are unemployed,” Tomasello said.
Baum believes most economists would be in favor of another extension. He said it would help the 1.3 million people losing benefits this month and the other 1.9 million people losing benefits by the end of June.
“People who are economically strapped basically help to keep them out of poverty or alleviate their poverty. The other advantage of helping those people is that they will spend the money, which will then increase the amount of economic activity so that will help business and other works stay employed.”
Tomasello said the extension not only helped him financially, it also served as a safety net while he looked for another opportunity.
“It helped tremendously. It was more of a security to know you had benefits still coming in while you looked for the type of work you were qualified for,” Tomasello said.
Baum said there is some truth to the idea that unemployment benefits discourage people from accepting lower paying jobs in hopes of holding out and finding something better, but he said that’s not necessarily a bad strategy.
“If they spend a little more time searching for a job that’s a better fit and higher paying it’s actually better for them and better for the economy,” Baum said.
Despite Tomasello’s unemployment, he is optimistic about his job prospects.
“I do know that the job market is better now than it was two years or three years ago. During that time is was probably more of a panic than it is now,” he said. “Everyday I’m getting something in emails or being contacted by a recruiter or a specific employer looking for an employee in my field.”
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