When unemployment runs out — what’s next?
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.
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