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Going to Plan B when jobless benefits get cut off

Unemployed Coloradans sit through the opening session of a job hunters' boot camp on April 19, 2010 in Aurora, Colo.

On Dec. 28, 1.3 million people lost their unemployment benefits because Congress can't agree on an extension. If the extension is not renewed, the number of long-term unemployed losing benefits will grow to five million by the end of the year.

Michelle Noriega is one of the 1.3 million whose benefits expired. On a recent Tuesday night, she was at The Other Door, a bar in North Hollywood. It was close to midnight when the moment she had been waiting for finally happened. Her name was pulled out of a bucket and she was invited up to the stage to perform.

Tuesday is open mic night for aspiring stand-up comedians. Michelle opened with a joke about getting older -- she's about to turn 39 -- and then moved on to a bit about sharing her last name with the former Panama dictator. No relation. Standup is new to Noriega.

"It's kind of a new passion of mine and it's helped me cope with not having a job," she said.

Noriega's last job was project manager at a nonprofit that promotes green building innovations. She was laid off at the end of 2012, and since then she's received $450 a week in unemployment benefits. That's not enough to cover her living expenses, but enough to allow her to apply only for jobs in her field. And she came close landing a few, including one that would have paid six figures.

"A job like that is really everything I want out of my next step career-wise," she said. "But if I don't have it that's just my reality."

Now that her benefits are gone, she's expanded her job search to places like Starbucks.

"I'm not above that," she said. "I would be very grateful to have a job like that, especially if I don't have unemployment benefits."

Before she graduated from college, she promised herself that she would never move back in with her parents, no matter how broke she was.

"I also promised that I would not pull money from my pension plan, but I've gone through all the other financial resources I have," said Noriega. She pulled money from her pension.

Right now she's waiting to hear back from three potential jobs, one good one, one entry-level office job, and one with Starbucks. If she doesn't have an offer by the end of this month, she will move back to Texas to live with her parents.

Labor economist Heidi Shierholz says Noriega and the other one million plus who lost benefits represent a cross section of the labor market.

"There's not something strange or uniquely unemployable, or uniquely inflexible about today's long term unemployed," said Shierholz.

What is unique about this extension cutoff is the timing.

"It has never been even close to this bad when extensions were allowed to expire in any prior recession," added Shierholz.

Right now, 2.6 percent of the labor force has been unemployed for longer than six months, which, Shierholz said, "is twice as high as it was any time Congress ever allowed the extensions to expire following prior recessions."

About the author

David Weinberg is a general assignment reporter at Marketplace.

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