Unemployment Benefits

Earlier this month, federal emergency benefits for the unemployed expired, and thousands of Marylanders lost a critical economic lifeline. These benefits were vital for the long-term unemployed, most of whom have already tapped out their personal savings and are now left wondering how to make ends meet. A recent Sun article, "Unemployed are losing some federal assistance" (June 29) suggests that these jobless workers forget a career and take anything with a paycheck. Unfortunately, this is exactly what many jobless workers have been trying for months with no luck.

Things have just gone from bad to worse for unemployed workers. The U.S. Senate last week failed to extend unemployment benefits that expired earlier this month. By the end of last week, more than 1.2 million people — including 14,700 Marylanders — lost their benefits, according to Department of Labor estimates. On top of that, Congress hasn't restored another recently expired subsidy that has been paying the bulk of health insurance premiums for workers who lost their jobs since September 2008.

Despite the optimism generated by recent job gains, one grim statistic casts a long shadow over the recovering economy - and over the future for more than 6 million American workers. In an astounding departure from past patterns, fully 44 percent of the nation's 15 million unemployed have been out of work for more than six months. And the evidence suggests many of them may never completely rebuild the working lives they lost. Never since the Great Depression has the U.S. labor market seen anything like it. The previous high in long-term unemployment was 26 percent in June 1983, just after the deep downturn of the early '80s.

The Maryland General Assembly passed a measure today that changes unemployment benefits so that the state can tap into nearly $127 million in federal stimulus money. The money will arrive as soon as Gov. Martin O'Malley, a Democrat who pushed for the changes, signs the bill into law. It is emergency legislation, so that could happen quickly. This morning, the House of Delegates overwhelmingly approved a plan the Senate had unanimously signed off on earlier this month. Lawmakers increased the number of people who can tap into benefits by shifting the work period reviewed when calculating claims.

Gov. Martin O'Malley's proposed changes to unemployment benefits have at last won the support of key business groups. The Maryland Chamber of Commerce's legislative policy committee voted Monday to back the Democratic governor's plan after changes were made to address concerns about long-term costs to employers. Until Monday, the Maryland Chamber and other business groups had opposed the legislation. With additional support now secured, the Senate Finance Committee will likely vote on the proposal today.

One of Gov. Martin O'Malley's signature efforts this year - a plan to cut the hefty unemployment-benefits taxes paid by businesses - has not gained the support of the business community despite weeks of talks, a senator said Friday. "I don't think the tax cut is going to be a reality," said Sen. Thomas M. Middleton, a Democrat who has been negotiating with business groups, the governor's office, labor and other interested parties. "That's my gut feeling. We're moving away from it."

Maryland business groups dismayed by Gov. Martin O'Malley's proposal to expand unemployment benefits, which could cost companies an estimated $20 million a year, are negotiating ways to offset the expense. O'Malley said last month that he wants the state to broaden the qualifying period for benefits so that the state can access about $127 million in federal money to prop up its quickly shrinking unemployment insurance fund. The change requires legislation. Business groups have balked at O'Malley's proposal to implement what's called the "alternative base period," which increases the period of time that is examined when determining whether someone is eligible for unemployment benefits.

Gov. Martin O'Malley said Thursday that he wants to bring Maryland's unemployment eligibility calculations into line with a national standard, a move that would enable the state to tap $126.8 million in federal money but would also cost employers more. Businesses have been bracing for a huge tax increase to replenish a nearly depleted state unemployment insurance fund, which has been drained by the state's worst unemployment rate in 26 years. Most employers have been expecting a nearly fourfold increase next year, which would mean they would pay $136 to $383 more per worker than they do now. The federal money will help lower that amount, O'Malley officials said.

From the point of view of businesses, the Catch-22 of unemployment insurance has always been this: When the economy is at its worst, they are taxed the most. Mark down 2009 as offering no exception to that particular rule. Based on calculations set today, Maryland is poised to raise unemployment insurance premiums to the maximum rate allowed by law in order to replenish a trust fund badly depleted by unemployment claims. In this, neither Gov. Martin O'Malley nor his Department of Labor, Licensing and Regulation has any choice.