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When unemployment runs out -- what's next?
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More long-term unemployed workers turn to food stamps and other government assistance programs. Seen here, people waiting in line for The Milk from the Heart, a food assistance program in New York.
Long-term unemployment has been above 40 percent since 2010. In previous recessions, it peaked around 20 percent. That’s more than 5 million Americans who have had no luck finding work in six months or longer. And nearly half-a-million of them have run out of extended unemployment benefits this year because of Congressional budget-cutting.
So what are they living on?
To find out, we headed to a state unemployment office in a lower-middle-class neighborhood in Portland, Ore.
Alan Kern is 62, with four grown children and a few grandkids as well. “I was a pastor and a missionary for many years,” he said, “and I’m writing a novel. I’m actually going over my novel and editing it here.”
He wasn’t just editing the novel -- about his missionary work in Africa. He was also scanning the help-wanted listings.
Kern lost his job last fall when his church closed its doors. And because Congress cut back on long-term jobless benefits, he’s only getting six months of unemployment insurance. It pays $700 a month. And it’s about to run out.
“That gets cut off, then I don’t know what we’re going to do,” he said.
Public policy professor Carl Van Horn has a pretty good guess what Kern will do, though. Van Horn runs the Center for Workforce Development at Rutgers University. He’s been following a sample group of long-term unemployed people since 2009.
“The majority of them sold possessions, missed payments on their mortgages or credit cards,” said Van Horn. “One in five moved in with another family member. A very large percentage borrowed money from friends or family, or even their adult children.”
The Data: Percentage of survey respondents unemployed more than two years who took the action, Source: John J. Heldrich Center for Workforce Development, Rutgers University.
Kern lost his house in the recession, and said his credit is shot. And he’s already gone down the road of asking family and friends for help.
“I did go to that point with my son, who’s in the military,” he said. He supported us for a while a few years back. That would be a last resort. Comes a point where you kind of lose self-respect.”
And Kern said, with his wife making around $1,700 per month at a florist’s shop, more government assistance is out of reach.
Van Horn said Kern is probably right. “The government programs -- almost all of them are means-tested. You have to have fairly low income and assets before you’re qualified.”
But more and more people are qualifying.
THE DATA: Percentage of households that accessed government support programs after exhausting unemployment insurance benefits in 2009. Source: Government Accountability Office.
Take food stamps—officially it’s called the Supplemental Nutrition Assistance Program, or SNAP. In 2007, the number of Americans getting food stamps was 26 million. Last year it was 44 million.
Waynette Dodson is one of them. She was another of the long-term unemployed people at the job center in Portland.
Dodson is 59. She got laid off as a drug-and-alcohol counselor back in 2010. She had been getting $34 a month in food stamps. Then, her unemployment insurance ran out.
“So now it’s boosted up to $180,” said Dodson. “You have to budget. I can manage pretty well.”
But all the good housekeeping in the world couldn’t replace $1,056 a month in unemployment checks. Dodson said her daughter still has a good job as a city bus driver.
“My baby girl, she steps in and helps her mom out, and my church that I belong to,” said Dodson. “And then, I just applied for SSI, because I do have a medical disability.”
SSI stands for Supplemental Security Income. It’s a Social Security program that pays people who can’t work full-time because they’re blind or disabled. Dodson has diabetes.
Since the recession hit, applications for SSI have spiked, and the number of new recipients is up more than 30 percent. That’s among workers who are already close to retirement, and also among the age group one would least expect: 18- to 34-year-olds, in their prime earning years.
Carl Van Horn says this is one way people are replacing income after unemployment runs out—if they can qualify with a disability. But he says for younger workers, it’s a dangerous road.
“Because they’ve labeled themselves as unable to work,” said Van Horn. “Getting disability benefits is often a one-way street. It’s very hard to come back into the labor market once you’ve gone in that direction”
Waynette Dodson isn’t worried about that, though. After two years without work, she’ll take whatever comes. “It is a very long time,” she said. “And sometimes I get frustrated, sometimes I just want to throw my hands up. But I got to keep going.”
According to the National Employment Law Project, more than 400,000 people have already run out of benefits this year as their federal extended unemployment insurance ran out. More will follow as states reduce the length of time people can stay on the rolls. Then they'll be scrambling for jobs -- and other government benefits -- as well.
Kai Ryssdal: The next big marker on the state of the American economy lands tomorrow morning at 8:30 Washington time. The May unemployment report. I could guess how many jobs the American economy added last month, or what the unemployment rate might turn out to be. No upside in that for me, really.
But there is gonna be one number in tomorrow's report that we can pretty much guarantee: Long-term unemployment will be somewhere above 40 percent. That's more than five million people out of work for six months or more, many of whom have already lost federal unemployment benefits.
We sent Marketplace's Mitchell Hartman to find out how they've been getting by.
Mitchell Hartman: If you want to find unemployed people, go where they've got the unemployment benefits. That's the state unemployment office.
This one is in a lower-middle-class neighborhood in Portland, Ore., where I meet Alan Kern. He's 62, with four grown children and a few grandkids as well.
Alan Kern: I was a pastor and a missionary for many years, and I'm writing a novel. I'm actually going over my novel and editing it here.
Not just editing the novel about his missionary work in Africa -- also scanning the 'help wanted' listings.
Kern lost his job last fall when his church closed its doors. And because Congress cut back on long-term jobless benefits, he's only getting six months of unemployment insurance.
It pays $700 a month. And it's about to run out.
Kern: That gets cut off, then I don't know what we're going to do.
Public policy professor Carl Van Horn has a pretty good guess what he'll do, though. Van Horn runs the Center for Workforce Development at Rutgers University. He's been following a sample group of long-term unemployed people since 2009.
Carl Van Horn: The majority of them sold possessions, missed payments on their mortgages or credit cards. One in five moved in with another family member. A very large percentage borrowed money from friends or family, or even their adult children.
So I asked Kern:
Hartman: What about family or friends? I mean, would you ever go to that point?
Kern: Yeah, well, I did go to that point with my son, who's in the military, he supported us for a while a few years back. That would be a last resort. Comes a point where you kind of lose self-respect.
And Kern says, with his wife making around $1,700 a month at a florist's shop, more government assistance is out of reach.
Van Horn says Kern is probably right.
Van Horn: The government programs, almost all of them are means-tested. You have to have fairly low income and assets before you're qualified.
But more and more people are qualifying. Take food stamps. In 2007, the number of Americans getting food stamps was 26 million. Last year it was 44 million.
Waynette Dodson is one of them-she's another of the long-term unemployed people I met at the job center in Portland. Dodson's 59. She got laid off as a drug-and-alcohol counselor back in 2010. She had been getting $34 per month in food stamps. Then, her unemployment insurance ran out.
Waynette Dodson: So now it's boosted up to $180. You have to budget. I can manage pretty well, household manage.
But all the good housekeeping in the world couldn't replace $1,056 a month in unemployment checks. Dodson says her daughter has a good job as a bus driver.
Dodson: My baby girl, she steps in and helps her mom out, and my church that I belong to. And then I just applied for SSI, because I do have a medical disability.
SSI -- that stands for Supplemental Security Income. It's a Social Security program that pays people who can't work full-time because they're blind or disabled. Dodson has diabetes.
Since the recession hit, applications for SSI have spiked, and the number of new recipients is up more than 30 percent. That's among workers who are already close to retirement, and also among the age group you'd least expect: 18- to 34-year-olds, in their prime earning years.
Carl Van Horn says this is one way people are replacing income after unemployment runs out -- if they can qualify with a disability. But he says for younger workers, it's a dangerous road.
Van Horn: Because they've labeled themselves as unable to work. Getting disability benefits is often a one-way street. It's very hard to come back into the labor market once you've gone in that direction.
Waynette Dodson isn't worried about that. She says, after two years without work, she'll take whatever comes.
Dodson: It is a very long time. And sometimes I get frustrated, sometimes I just want to throw my hands up. But I got to keep going.
More than 400,000 people have already run out of benefits this year as their long-term unemployment insurance ran out. More will follow as states reduce the length of time people can stay on the rolls. Then they'll be scrambling for jobs -- and other government benefits -- as well.
I'm Mitchell Hartman for Marketplace.
Mine got cut off after 67 weeks in early December because supposedly, the job market is "picking up." Still no job. If things are improving so much, as the media and the Democrats keep insisting, why extend unemployment benefits? People like me have been dropped to make it appear that way, and if the benefits are not extended, look for the so-called unemployment rate to drop even more. I can see it now. In February, the news will come on the television and someone disconnected from reality will exclaim: "Unemployment rate fell nationwide to under 5%. The economy is poised to come back as this is a sign of improvement!!!"
Some comments here:
Anecdotally I can say that I am over 50 and have tried unsuccessfully to get a fast food job several years ago, before the economy soured. I ended up with a minimum wage job working for an employer who owns several convenience stores. Several of my co-workers have college degrees (two are over 50) and we all earn within 20 cents per hour of minimum wage. The job market has been difficult in Portland for the past few years. I think fast food employers strongly prefer young workers who are probably perceived as quicker and more agile than older workers. A 62-year-old (as in this story) would probably be extremely difficult to place in a fast food job.
Food stamps are based on net (after-tax) household income minus the sum of out-of-pocket housing and medical expenses. Rents in Portland have soared in the past two years, especially from 2010 to 2011 - 8 percent in one year, according to the National Association of Realtors, 10 percent the same year, according to Joseph Chaplik, a real estate broker specializing in investment real estate. When rents soar, so does food stamp spending.
While fairly unlikely, accepting a low-paying job while receiving unemployment benefits has an interesting risk I didn't know about until I read about two people who experienced it: Accepting a new job makes your new job the basis for future unemployment insurance claims, reducing your benefits if you are laid off from a lower-paying new job.
millions of the long term unemployed are classified as 'Adults without Dependent Children' [AwDC] - which simply means that they do not qualify for any assistance other than food stamps once their unemployment benefits are exhausted. Many of the individuals and families receiving assistance from these programs not only fall into the ranks of the unemployed, but are many are also among the under-employed and 'working poor'.
Along with skyrocketing gas prices, food prices have also soared, leaving many with the absolute inability to feed, clothe and house themselves and/or their families without some level of assistance. The plight for those 'AwDCs' continues to be grim, and will only get worse if the SNAP program is cut even further while, at the same time, millions of 'AwDCs' also remain without meaningful work and the means necessary to sustain their very own existence financially.
Denver Unemployment Examiner
http://www.examiner.com/article/house-gop-proposes-34b-cuts-to-food-stam...
I don't get it. We hear from one person that his $700 a month unemployment is about to run out but he can't find a job. Yet there are listings for fast food places hiring in Portland at $8 to $9 a hour. Just 30 hours a week of work would get him $960 a month. An listing for wheelchair transport starting at $10 an hour is there. 70 hours a month matches what he is getting from the tax payer now.
Why can I find these jobs that pay better than UE but he can't? Or is he waiting for the UE to run out and then he will "be scrambling for jobs"?
Add in there are other states that are hiring people left and right. Move! Go get a job, stop waiting around for someone to give you a job like the one you don't have any more. You don't have it because of a reason: It is not needed, or you were not doing it well enough to make it worth keep you. If it is not needed any more, it is not going to come back.
People like you are so annoying. The unemployed see those same signs too, you obnoxious blankety blank. They apply....along with 100 others. 99 don't get the job. And as for moving... with what money? Einstein.
Stop trying to be antagonistic and start being better connected to your fellow man. You aren't elevating yourself, this lowers you.
I hear what BusyPoorDad is saying. Many decent, well-meaning people have similar perceptions. I would ask people to consider that seeing a job in the newspaper or online is not the same as "landing" that job. Competition for even menial jobs can be fierce, especially with so many student looking for summer employment. How many of us can honestly say that we would hire a 62 year old man over a 20-something college student for jobs requiring energy, stamina, and strength? I agree that some of the gentleman's time should be spent pursuing these jobs as a back up that could extend his unemployment insurance. Can we agree, too, that such jobs are not a solution to the problem of long term unemployment, especially for middle-aged workers?
