Insurance Little Help to Louisiana Unemployed
Insurance little help to Louisiana unemployed
By Bruce Alpert
Washington bureau/The Times-Picayune
WASHINGTON -- If trends continue, almost four out of five Louisiana workers displaced by the current economic slowdown won't qualify for unemployment insurance, according to federal statistics.
Only New Hampshire had a lower rate than Louisiana's 21 percent eligibility. State officials attribute the low percentage to the state's large number of self-employed workers who don't qualify for benefits, but critics say it's the fault of the state's overly rigid enforcement of eligibility rules.
Nationally, about 35 percent of the unemployed qualify for benefits.
Some members of Congress are suggesting that the unemployment crunch resulting from the Sept. 11 terrorism attacks requires federal intervention.
"In this period of economic uncertainty, we must protect American workers and their families who are imperiled by mounting job losses," said Rep. Ben Cardin, D-Md., the sponsor of legislation that would establish a $15 billion emergency program to extend unemployment benefits.
During the past month, companies have announced more than 200,000 layoffs, many in the airline and tourism industries. Tens of thousands of other workers have had their hours reduced.
The reasons that most people who lose their jobs don't qualify for unemployment insurance benefits, which in Louisiana range from $10 to $258 a week, vary from state to state.
But experts generally concede that a third or more of those denied benefits were never intended as beneficiaries for a program that is supposed to help people who lose their jobs through no fault of their own. These are people who quit their jobs, often with hopes of landing a position elsewhere.
Others are a victim of rules that Cardin and other critics say haven't been significantly updated in the 66 years since the unemployment insurance system was established.
The program seemed geared to a time when more Americans worked in factory jobs, subject to temporary seasonal layoffs. The system generally doesn't provide benefits to the increasing numbers of part-time workers, particularly women, and recently hired low-wage workers, many of whom left the welfare system under the new government-imposed time limit on benefits.
The problem, according to Cardin, is that the system used to calculate eligibility often does not include the last few months of earnings.
For recently hired workers who were laid off, that omission is often enough to disqualify them. To qualify for the maximum cash benefits in Louisiana of $258 a week, applicants would need to earn at least $23,160 a year before losing their job. A person making $12,000 would get about half the benefit, or $129 weekly.
In some states, including Louisiana, people can reapply and seek to include the most recent earnings, but the delay is often discouraging enough for some people to give up and not follow up, according to the General Accounting Service, the investigatory arm of Congress.
Cardin's bill would provide money to help states cover workers who would be eligible if their final quarter of earnings was considered and also to help cover laid-off part-time workers. It also would provide 13 extra weeks of benefits to those who have exhausted the current limit of 26 weeks.
Wendell Primus, director of income security for the liberal Center on Budget and Policy Priorities, said that providing laid-off workers with unemployment insurance benefits is a good way to stimulate the economy.
"Given the impact on the tourism industry of the Sept. 11 attacks, where a lot of former (welfare) recipients worked, many of whom are either out of work or working fewer hours, this would be an especially good time to improve the system, if not permanently, at least on a temporary basis," Primus said.
The proposal is meeting resistance from some state officials, who fear the expanded eligibility will eventually be paid out of state unemployment trust funds, now financed entirely by employers, and from the Bush administration, which contends the proposal by Cardin and other Democrats is too expensive.
Louisiana Labor Secretary Garey Forster said it will be hard to "discontinue benefits" when the federal program expires and that financing it on a state level could "quickly erode" the state's $1.5 billion unemployment insurance trust fund. He said the state is trying to help displaced workers by offering expanded training programs, including help for laid-off hotel cleaners to get similar jobs in hospitals and other medical facilities.
The Bush administration favors a $3 billion program that would provide an extra 13 weeks of unemployment insurance benefits beyond the usual 26 weeks in states hardest hit by job losses since the Sept. 11 terrorist attacks.
Labor Secretary Elaine Chao said it's the best way to help workers in states with the most serious unemployment problems, combined with a stimulus package that relies heavily on tax cuts to help businesses expand and hire more workers.
"Our workers need to get back to work -- not just get lost in a bureaucracy of dead-end social services," Chao told the House Educational and Workforce Committee last week.
But Primus said the extra 13 weeks of benefits, although important, would do nothing for people who don't qualify because of the current rule structure, nor would it help people laid off Sept. 10 or earlier, who are having a harder time finding work because of the worsening economy. And it would exclude people, he said, who don't live in states where unemployment rates have increased by 30 percent or more.
Wade Rathke, chief organizer for Local No. 100 of the Service Employees International Union in New Orleans, said Louisiana and the federal government should do everything possible to expand eligibility for unemployment benefits. He said the state lags because its employers tend to more aggressively fight claims for benefits, and the state all too often takes their side, forcing workers to go through a burdensome appeals process.
But Forster, the state labor chief, said he hears "all the time" from employers who say that state is too generous in assessing eligibility. He attributes the state's low participation rate to a disproportionate number of self-employed workers in the oil and gas industry, as well as such service-related jobs as taxi drivers, who don't generally qualify for benefits.
Sen. John Breaux, D-La., said he hopes the administration and House Republicans are willing to compromise, arguing that the $100 billion stimulus package now before the House puts too much emphasis on tax cuts and not enough on "helping people who right now desperately need our help."
"The package should be aimed at helping reduce unemployment, but also providing help for those who don't have work through no fault of their own, the loss of jobs since the Sept. 11 terrorist attacks," he said.
Bruce Alpert can be reached at email@example.com or (202) 383-7861.
© The Times-Picayune. Used with permission.