Connecticut’s unemployed pin hopes on divided Congress

A job seeker is getting help at one of a number of CTWorks Career Centers (which is part of the American Job Center network).

Photo from Capitol Workforce Partners

A job seeker is getting help at a CTWorks Career Center.

Washington – Like millions of other Americans, Joel Zaremby was blindsided when Congress failed to extend benefits for long-term unemployed people at the end of 2013.

Zaremby, 65, an advertising and sales representative who lost his job with a marketing company in Hamden about 18 months ago, said he’s sent out stacks of resumes but can’t find a job. He lives in Norwalk with his wife, who also lost a full-time job but has found freelance marketing work.

The $400 a week Zaremby received in unemployment benefits helped pay bills. Then Congress failed to extend the program and those benefits expired Dec. 28 — even as it seems the nation’s economic recovery has passed over those who’ve been out of work a long time.

“I don’t want welfare, I don’t want food stamps because I’m too proud,” Zaremby said. “I’m literally dying for a job. But I don’t understand why Congress can’t help people like me.”

The Democratic-led Senate has voted several times to restore benefits to 3.6 million long-term unemployed people like Zaremby, but fell one vote short of the 60-vote threshold needed to move the legislation forward. Now the Senate is trying one more time to find a compromise that will clear that hurdle.

Long-term unemployment by industry

 

But Zaremby is not hopeful. He said he’s especially frustrated with lawmakers who say giving benefits to the long-term unemployed is a disincentive for them to find work.

“They believe that people would people would rather just sit at home and not work,” he said. “Yeah, I would rather have $400 a week than $2,000 a week.”

Washington used to help

Most states, including Connecticut, provide 26 weeks of unemployment benefits. Before Dec. 28, the federal government had stepped in after that to continue the benefits, which average about $300 a week, because the economy was in trouble.

In 2008, the depth of the latest recession, the federal government provided 73 weeks of extra benefits in Connecticut. As the economy improved, that was reduced to 37 weeks, for a total of 63 weeks of benefits.

But now anyone who loses a job is eligible only for 26 weeks of benefits. The Connecticut Department of Labor determined that the end of long-term benefits cut aid to about  62,000 state residents like Zaremby who’ve been out of work more than six months.

Sen. Jack Reed, D-R.I., whose state’s 9.1 percent unemployment rate is the highest in the nation, is trying to marshal a bill through the Senate that would pay for six months of long-term benefits, including three months of retroactive pay for people, like Zaremby, who got cut off at the end of December.

Reed proposes to pay for the bill’s $12 billion cost from money the federal government saved in a recently approved farm bill.

But Senate Republicans have rejected that plan and have an alternative sponsored by Sen. Dean Heller, R-Nev. Heller’s bill would pay for five months of benefits, including three months of retroactive pay, and cover the $10 billion cost of the bill by extending certain customs user fees, changing a pension accounting rule and by prohibiting people collecting Social Security disability from getting unemployment checks at the same time.

Republicans also are proposing to cut off payments to people who refuse offers of “suitable work,” or fail to apply for jobs recommended by state unemployment agencies.

Reed press secretary Chip Unruh said both sides are trying to reach a compromise and hope for a vote by the end of the month. But he said a five-month bill would not offer enough help, and Democrats would reject changes to the eligibility of the program, all except one of the ones sought by the GOP – cutting off benefits to millionaires.

Sen. Richard Blumenthal, D-Conn., said he’s hopeful of a deal because there are a lot of options on the table.

“The more ideas are bubbling, the better the prospects,” he said.

But in the House of Representatives, Speaker John Boehner has rejected even the Senate Republican proposals.

“That kind of throws cold water on things,” Unruh said.

‘A lot of us feel helpless’

Meanwhile, economists and labor advocates are trying to figure out what the long-term uninsured are doing without federal help and how to aid them.

“Some of them have gone through all of their resources,” said Sandy Rodriguez of Capital Workforce Partners, a Hartford-based labor advocacy group.

East Hartford resident Oscar Rodriguez

Photo from Capitol Workforce Partners

East Hartford resident Oscar Espinoza

Oscar Espinoza of East Hartford is among those who have depleted their resources. He said he gets by with loans from his family and by selling some of his possessions.

Espinoza, 50, is an Internet technology specialist who lost his job eight months ago. After being laid off, Espinoza took out a $4,500 personal loan to upgrade his training and receive certification in additional tech fields.

He thought the effort would help him find a job, but it didn’t. He said he is disgusted with Congress’ inaction.

“A lot of us feel powerless,” Espinoza said. “We’ve been left out on the street. And this can happen to anyone.”

Economists say about a third of the long-term unemployed are drawing down savings, 401Ks or depleting other assets, moving in with family or borrowing money from family members. Others are taking part-times jobs, sometimes more than one, that are usually not in their fields.

Others have given up on the job market, retiring on Social Security or applying for disability benefits.

The WorkPlace, a nonprofit group in Bridgeport that helps job seekers, has a pilot program targeted to help the long-term unemployed.

Under the program, businesses who hire unemployed workers receive subsidies from The Workplace that pay 100 percent of their salaries for three weeks.

Zaremby found a job through this program, but it is a sales job that only pays commission and he hasn’t yet made a sale.

He said he may have to retire on Social Security next year, if he doesn’t find a job.

“But I want to keep working,” Zaremby said.

There’s increasing evidence of employers’ discriminating against the long-term unemployed, rejecting out of hand their applications for work.

“Employers are not looking at these people at all,” said Tom Long, spokesman for The WorkPlace.

A bill proposed by the Malloy administration would prohibit publication of help-wanted ads that discriminate against the unemployed. The bill, which has the backing of legislative leaders, has cleared the first hurdle by being passed by the Labor Committee.

The WorkPlace provides other help to the long-term unemployed, including confidence-boosting counseling, Long said.

“The notion is, when people have been out of work for a long time, their needs change,” he said.

Economist: Private efforts not enough

Peter Diamond, an economics professor at the Massachusetts Institute of Technology who has won a Nobel Prize for his work on the unemployed, said private efforts to hire the long-term unemployed isn’t enough.

He said the federal government should increase stimulus spending to create jobs – even as Congress is cutting budgets because of concerns over the deficit.

“That’s misguided,” Diamond said. “It doesn’t draw a distinction between spending that stimulates the economy and other spending.”

An example of spending that would stimulate the economy is federal investment in research and development, Diamond said. But he doubts lawmakers will heed his advice — or vote to reinstate benefits to those who have been out of work a long time.

“I am not an optimist about this Congress,” he said.

Last year, the Urban Institute released a report on the long-term unemployed that said changes in the workplace that ushered in technological innovation and automation almost guarantees that some who have been laid off will find it difficult, or even impossible, to find another job.

“It is important to note that even if the economy returns to full employment, there are likely to remain many workers facing long-term unemployment challenges,” the report said.

The Urban Institute study also said that the long-term unemployed tend to be older, nonwhite, unmarried or have disabilities.

The Connecticut Department of Labor determined that 39.2 percent of those who have exhausted 26 weeks of state unemployment benefits are 50 years old or older.

It also found that long-term unemployed people in the state were slightly more likely to be female and determined that the highest percentage of these people previously worked in the information, real estate, insurance and finance industries or were company managers.

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