Kathy Vanco of Rahway has been out of work for six months. She has been surviving on a biweekly unemployment check of about $700. That came to an end this week, however, and now she may have to dip into her savings to make ends meet.
“Without unemployment, I won’t be able to pay the car insurance, and forget about health insurance,” she said.
A year ago, Vanco would have been eligible for up to 47 weeks of emergency unemployment benefits – for a total of 73 weeks of aid -- but the federal program expired on December 28 and has not been renewed, having stalled in the U.S. Senate on Tuesday. Unemployed workers now are eligible only for the 26 weeks of state assistance.
An estimated 90,300 unemployed New Jerseyans who were receiving emergency benefits were cut off late last month when a House and Senate budget deal did not include an extension. Another 89,100 jobless workers in the state will see their regular state unemployment benefits run out over the next six months. All workers who qualified for state benefits would have been eligible for the federal extension when the state aid expired.
The long-term unemployment benefits were enacted in 2008 and revised several times, most recently last year. New Jersey workers, because the state’s unemployment rate has been hovering between 7 percent and 9 percent, were eligible for up to 47 extra weeks of federally funded unemployment benefits.
Workers and businesses pay into state and federal unemployment trust funds and then can draw aid from the program if they lose their jobs, provided they were not fired for cause and have worked within the last 18 months. Traditionally, benefits are paid through a federal-state partnership, but extended benefits paid out since 2009 have been fully funded by the federal government, according to a U.S. Department of Labor fact sheet.
Advocates for New Jersey workers and the poor say they are concerned that the Senate’s failure to reauthorize the extension could result in greater stress on agencies that provide help to those in need and make it harder for those who are out of work to keep looking for jobs.
The benefits, which average $394 a week in New Jersey, help jobless workers keep food on their tables and gas in their cars as they look for work and allow them to keep looking for work in an economy in which there are about three applicants for every job opening, advocates say.
Without these benefits, advocates say, the long-term unemployed could turn to state, local and private assistance programs, potentially seeking general assistance or help from local food pantries.
Members of New Jersey’s Congressional delegation and its two senators have been pushing for reauthorization of the benefits. Both Sen. Robert Menendez and Sen. Cory Booker have endorsed a three-month extension, and South Jersey Republicans Frank LoBiondo and Jon Runyon signed a letter sent to House Republican leadership in December calling for the benefits to be extended.
Democratic and Republican leadership negotiated amendments, hoping to vote on the benefits on Tuesday, but the debate ended in a stalemate when Republicans filibustered the legislation. The plan called for the extension to be paid for with future budget cuts, which Republicans said was unacceptable.
“The Senate should actually be paying for whatever it passes – and not with spending cuts 11 years from now that may never happen,” Senate Minority Leader Mitch McConnell said Tuesday, according to a press release. Republicans also balked at limitations on debate, which McConnell said demonstrated “an attitude that essentially says the views of half the American people don’t matter in the Senate.”
“This is something we can and should do,” Democratic Rep. Rush Holt, who represents Central New Jersey in the House, said by phone Tuesday.
The move by Senate Republicans to impose “a requirement that other programs be cut to cover” benefits was unprecedented when the jobless rate remains historically high, Holt added.
“We shouldn’t be (requiring cuts to the budget) for an emergency measure, which this is,” he said. “Whether for (Hurricane) Sandy or the tornadoes in Oklahoma or this long-term, hardcore unemployment situation, we don’t impose that kind of offset.”
U.S. Rep. Donald Payne, a Democrat who represents Essex County, said on Monday that the benefits allow the unemployed to “meet their needs on a minimal basis to keep them afloat until they can find a job.”
“We have a moral obligation to help our fellow Americans out and give them the economic security that they need to put food on the table, to keep a roof over their head, and to pay their bills so that they have the ability to continue to look for a job,” Payne said.
Critics, however, say that the benefits are being offered far longer than in previous recessions and that the benefits create incentives for the unemployed to not seek jobs. They say the federal government should be focusing on creating jobs and that, if unemployment benefits are to be extended, there need to be cuts in other programs.Valerie Toton, who has been unemployed since July, takes exception with the argument. The Hillside resident said elected officials in Washington are only focused on numbers and that “numbers are not representing things accurately.” She added that unemployment insurance is “not a handout” and she “paid into this my whole life.”
Toton had worked 29 years for the same company when she was laid off in July. She collected unemployment for six months, bringing in $463 a week, and has been looking for work since losing her job. Toton is the mother of a 5-year-old boy and takes care of her 91-year-old grandmother. Her husband has been out of work since 2009.
“I have never been unemployed,” she said Tuesday night. “At 15, I had three jobs.”
The family scaled back when her husband lost his job, which happened shortly after their son was born, and they cut back further when she lost her job. They have one car, which they cannot repair, have had to cut back on food, and cannot enroll their son in school aftercare.
She said she is “past the point” of going to a food pantry.
“If not for my high school best friend showing up with carload of food on Saturday, my son would have gone to school today with nothing,” she said. “I don’t need to eat. But I can’t have my child hungry.”
Ann Vardeman, an organizer with the liberal advocacy group Citizen Action, said last week that allowing the benefit extension to expire was “kicking people down a hole when they are down.”
“These people have been out there looking for work,” she said. “This has put some money in pockets and they won’t have that money anymore. Once those unemployment benefits are cut, that is how people fall out of the work force and how people slide into poverty.”
Vardeman acknowledged that benefits have been in place longer than in the past, but she said the most recent recession has been a stubborn one, slowing the recovery and leaving the unemployment rate comparatively high. The national unemployment rate was 6.7 percent in December, still more than a percentage point and a half higher than in 2008 when the recession began. And, according to the federal Bureau of Labor Statistics, 3.9 million of the 10.4 million unemployed nationally have been without work for 27 weeks or longer. The New Jersey unemployment rate is 7.8 percent.
“The program has gone on for longer than it has historically in other recessions, but that is because this recession has taken longer to recover,” she said.
Diane Riley, advocacy director for the Community Food Bank of New Jersey in Hillside, said she is concerned that the loss of unemployment aid will force people to rely on already stressed social service agencies, like the state’s network of private pantries and soup kitchens. Many already are turning to pantries to put food on the table – about 10 percent of the 3,000 people they screened for federal nutrition programs over the last three years were receiving unemployment benefits.
“While we can’t draw direct lines right now, we are concerned,” she said. “Every time somebody’s income gets cut, we see people struggling more.”
She said she is particularly concerned about the long-term unemployed, who often “have much less of a chance to get back on their feet” and may have to turn to pantries for longer periods.
“What is going to happen with their house, their rent?” she said. “I am concerned with what they are using that money for. That is a lot of money to lose. It is more than just food money they are losing.”
Shawn Sheekey, director of the Camden County Board of Social Services, said it is difficult to gauge how the loss of unemployment benefits will affect local service providers, because many have been seeing a steady increase in clients since the recession hit in 2008. In Camden County, he said, 4,700 people were expected to have benefits cut off in December and it is “not a far stretch to imagine that they are going to show up at our door.”
“They have lost all income and the one thing that they had in assisting them in keeping up with their bills,” he said.
That’s the prospect that Vanco is facing.
“I’m not broke, but if I didn’t have the money I have in bank I wouldn’t be able to survive,” she said. “How can a person look for work, if you can’t put gas in the tank to go on an interview, or pay the cell phone to hear about the interview.”