Unemployment benefits due to end for thousands of Maryland residents

Emergency program lapses on Tuesday

  • Diedre Moore-Durant, early intervention facilitator at the Eastside One-Stop Career Center, speaks during a discussion about the impact of having unemployment benefits phased out starting Dec. 1.
Diedre Moore-Durant, early intervention facilitator at the… (Baltimore Sun photo by Amy…)
November 27, 2010|By Jamie Smith Hopkins, The Baltimore Sun

Thousands of Marylanders face being cut off from unemployment benefits next month — just in time for the holiday season — as Congress remains undecided on whether to extend the payments in one of the worst job markets in decades.

An estimated 2 million people nationwide are slated to lose benefits, including 14,000 in Maryland. And more than 30,000 laid-off Maryland residents will exhaust their benefits early next year. The phase-out is happening because a federally funded program that gave residents payments beyond the normal 26 weeks lapses on Tuesday.

Congress has let the extended benefits program expire before, only to restart it later. Legislation in the House of Representatives before the Thanksgiving break did not receive the supermajority vote required, but worker advocates say another attempt is likely — leaving jobless residents in a state of suspense.

"We need the additional benefits to continue," said Tyrone Chapman, 44, an accountant from East Baltimore who said his payments would stop around Christmas if Congress doesn't act. "It's just really hard out there. You've got kids coming out of college that are fighting for the same jobs we are."

The program, known as emergency unemployment compensation, extended benefits to 73 weeks in Maryland and to as many as 99 weeks in states hardest-hit by the deep recession and the rough job market that has lingered in its aftermath. Now the additional payments are set to phase out, with most claimants due to be cut off after either 46 weeks or 60 weeks, depending on when they were laid off. Those not yet collecting extended benefits will not get to start.

The fate of the program has set off a passionate debate about national priorities: What's more important, tiding residents over until they can find a job in a difficult economy or attacking the looming deficit? It comes as Congress also considers whether to extend tax cuts passed during the administration of President George W. Bush, with Republicans seeking to retain the cuts for everyone and Democrats calling for continued tax relief for all but the most wealthy.

Mark Zandi, chief economist with Moody's Analytics, said that while it's a lousy time to raise taxes, it's even more imperative to extend emergency unemployment benefits through next spring at the least. When several million unemployed lose that financial safety net, they're not the only ones walloped, he pointed out. Such a move also reduces the flow of money to retailers, a major driver of the economy.

A new study commissioned by the U.S. Department of Labor said the benefit payments that laid-off workers then pumped back into the economy saved 1.8 million jobs from being cut during the recession's worst point.

"The recovery is too fragile to take a chance with," said Zandi, who was an economic adviser to Sen. John McCain during the Republican's 2008 presidential bid and also has advised congressional Democrats. "The vast majority of recipients aren't taking advantage of the system. They need the benefits. They can't find work."

The odds of landing a job are terrible. For every job opening in September there were five unemployed workers, the latest figure from the Labor Department.

Maryland's unemployment rate — 7.4 percent — is better than the national 9.6 percent. Even so, nearly 220,000 Maryland residents are out of work and actively looking for a job, twice as many as there were three years ago.

Baltimore's government-run career centers, long used to help lower-skill residents apply for jobs and improve computer proficiency, have seen the number of professionals in need of assistance spike in the past year.

Regardless of their background, clients nearing the end of their unemployment benefits "are scared," said Karen L. Sitnick, director of the Mayor's Office of Employment Development. Career center staffers might need to act as counselors, helping residents figure out how they can get by if the payments stop before they find a job, she said.

"We are starting to see some signs that employers are hiring," Sitnick said. "We are getting people placed; that's the good news. But I think … it's still going to be pretty challenging for a while."

Barry F. Williams, director of the Office of Workforce Development in Baltimore County, expects to see more foreclosures after the emergency benefits end. "It's that whole spiraling effect," he said.

Christine Owens, executive director of the National Employment Law Project, believes Congress will end up extending the benefits. But not necessarily soon. When the program last expired, in early June, it wasn't restarted for 51 days.

"While they're playing a game of chicken on the Hill, this has real-life consequences for people," Owens said.

She said her organization heard from a woman who couldn't make her car payments when her benefits stopped during the summer. She got a job, but then lost it after her car was repossessed and she had no way to get to work, Owens said.

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