How Does EUC work?

For people who are wondering how the Emergency Unemployment Compensation works, the folks at the center for budget and policy priorities have issued a handy bit of information for how many weeks of unemployment you can expect to receive depending on what state you have worked in.

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The unemployment insurance (UI) system helps many people who have lost their jobs by temporarily replacing part of their wages. (See “Policy Basics: Unemployment Insurance.”) The total number of weeks of benefits available in any particular state depends on the unemployment rate and unemployment insurance laws in the state where the person worked. The map below shows the maximum number of weeks of benefits available in each state.

Workers in any state can receive up to 26 weeks of benefits from the regular state-funded unemployment compensation program.

In the current downturn, workers in any state who exhaust their regular UI benefits before they can find a job can receive up to 34 additional weeks of benefits through the temporary federal Emergency Unemployment Compensation (EUC) program enacted in 2008. That number rises to 53 weeks in states with especially high unemployment rates.

Workers who exhaust their regular UI and EUC benefits can receive additional weeks of benefits through the permanent federal-state Extended Benefits (EB) program if their state’s unemployment insurance laws allow it (see table below).

The table below shows how many states fall into each category shown in the map, and what combination of regular UI, EUC, and EB benefits produces the total for those states.

60 minutes story on the 99 weeks of Unemployment

60 minutes did a story on people who are running out of the 99 weeks of Unemployment checks. They speak about people who have spent hardship withdrawls from their 401k's and now depend on charities for free food.

They have stories of people who earned $70,000 to $200,000 who were shop-a-holics and now after having applied to hundreds of jobs are forced to scrounge around for recyclables and depend on family and friends for financial help.

How Many Weeks of Unemployment do I get?

Click on Map for a Larger Image

If you're wondering just how many weeks of unemployment you're eligible for, the people at the center of budget and policy on priorities produced this interesting chart that shows that much of the nation is able to receive 99 weeks of unemployment checks.

Many states such as Florida, California, Michigan, Ohio, Illinois, Georgia, Nevada, Arizona, North Carolina, Ohio and Illinois get the full 99 weeks of payments. Other states such as Wisconsin, Texas and New York get 93 weeks of unemployment benefits; while the dakotas and Nebraska get the least---60 weeks (which really isn't all that bad because it's still over a year of subsidies).

What's the employment situation?

According to the Bureau of Labor Statistics:

THE EMPLOYMENT SITUATION – SEPTEMBER 2010
Nonfarm payroll employment edged down (-95,000) in September, and the unemployment rate was unchanged at 9.6 percent, the U.S. Bureau of Labor Statistics reported today. Government employment declined (-159,000), reflecting both a drop in the number of temporary jobs for Census 2010 and job losses in local government.

Household Survey Data
The number of unemployed persons, at 14.8 million, was essentially unchanged in September, and the unemployment rate held at 9.6 percent. (See table A-1.)
Among the major worker groups, the unemployment rate for adult men (9.8 percent), adult women (8.0 percent), teenagers (26.0 percent), whites (8.7 percent), blacks (16.1 percent), and Hispanics (12.4 percent) showed little or no change in September. The jobless rate for Asians was 6.4 percent, not seasonally
adjusted. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed (those jobless for 27 weeks and over), at 6.1 million, was little changed over the month but was down by 640,000 since a series high of 6.8 million in May. In September, 1.7 percent of unemployed persons had been jobless for 27 weeks or more. (See table A-12.) In September, both the civilian labor force participation rate, at 64.7 percent, and the employmentpopulation
ratio, at 58.5 percent, were unchanged. (See table A-1.) The number of persons employed part time for economic reasons (sometimes referred to as involuntary
part-time workers) rose by 612,000 over the month to 9.5 million.

Over the past 2 months, the number of such workers has increased by 943,000. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.) About 2.5 million persons were marginally attached to the labor force in September, up from 2.2 million a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months.

They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

Among the marginally attached, there were 1.2 million discouraged workers in September, an increase of 503,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3
million persons marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Bank of Tokyo Mitsubishi's US Economist on the Unemployment Picture

On February 5th, Bloomberg interviewed Ellen Zentner, Senior US economist at Bank of Tokyo-Mitsubishi UFJ Ltd. to discuss the January unemployment rate and the outlook for the US Labor Market.

Ellen's views include:

• "the labor market is definitely improving, we got a bigger downward revision to payroll data, leading up to today... No we lost 8.4 million jobs vs over 7 million... And this contraction in jobs correlates more to the decline in consumer spending."
• In january's report the comments are suspicious because jobs aren't being created, yet the unemployment rate drops. Looking at labor force participation, you see that household employment has increased. But you also need to know how many people dropped out of the labor market all together.
• We have record numbers of discouraged workers and many of them are permanently lost---but thousands will come back into the labor market.
• The data is showing some job gains in some areas---but it isn't happening in all sectors of the economy. January saw the first increase in manufacturing jobs in over 3 years.
• Forward looking indicators show that part-time and contract jobs should improve in the next few months---This isn't as good as landing higher paying full time jobs.
• The labor market will wadddle along for a little bit, because you have create jobs for the previously displaced and the teenagers that are becoming working aged adults---this isn't going to happen for some time.
  

65 Years of Unemployment Data

The St Louis Fed publishes regular updates to the Civilian Unemployment Rate. I thought this chart spanning the ~65 years from post WWII (1945) to today (2010) you can see how recessions have frequently caused large spikes in the unemployment rate.

The spike from the most recent recession is the second highest in the post-war era---That's the bad news. The good news is that during the past few months the Jobless rate went from over 10% to 9.7%... Maybe things are starting to improve.

Unemployment Rate by County

According to the U.S. Department of Labor's Bureau of Labor Statistics, there are nearly 30 million people currently unemployed -- that's including those involuntarily working part time and those who want a job, but have given up on trying to find one. In the face of the worst economic upheaval since the Great Depression, millions of Americans are hurting. "

The Decline: The Geography of a Recession," as created by labor writer LaToya Egwuekwe, serves as a vivid representation of just how much. Watch the deteriorating transformation of the U.S. economy from January 2007 -- approximately one year before the start of the recession -- to the most recent unemployment data available today. Original link: www.latoyaegwuekwe.com/geographyofarecession.html.

This data was last updated in February 2010.

More Women Working than Men

As Econompicdata shows for the first time in US history there are more women with jobs than men. This is one reason why the current great recession has been called a mancession. As many industries that have been dominated by males (construction and manufacturing) have been hit quite hard by lay-offs and job-losses, while many industries dominated by women (education and health-care) have not suffered as extreme of a hit to their payrolls.

For additional reading on the subject, you can check out The NY Times or Casey Mulligan's Blog (he's a professor at the University of Chicago).

January Jobs Report---Unemployment drops to 9.7%

CNBC reports in this 10 minute video clip the January, 2010 jobs report. The Unemployment rate is at 9.7%. The unemployment declined because of the benchmark revisions and because more people were finding work.

Annual benchmark revisions show 8.4 million jobs lost since the start of the recession versus 7.2 million prior to the revision.

Rick Santelli commented that,the benchmark revision was in the realm of expectations, and he wants to know how much the labor force shrank / (grew) in the period.

The average work week was higher at 33.3 hours per week versus 33.2 hours per week prior to the report.

Temporary jobs continue to increase, but construction jobs continue to decline.

In February and March, government employment is expected to increase as the census starts its 2010 hiring spree.

Mark Zandi views the decline in unemployment rate confusing, because payroll employment continues to shrink (ADP data), so how could unemployment be improving?

In order to stabilize employment, analysts say 125,000 jobs per month need to be created---However, this past month 20,000 jobs were still destroyed. While the trend is still improving, things aren't fully positive yet.

Trucking Jobs have Dropped During the Recession

The >Bureau of Labor Statistics has recently issued a study that shows how employment in the truck transportation industry has dropped from 1.45 million jobs before 2008 to about 1.25 million trucking jobs by the end of 2009. This decrease of 200,000 drivers is significant not only for the truckers, but also for the manufacturers and merchants that sell the goods that these guys deliver.

You can see in the above chart that the severity of the decline in this recession (Green Line) is much steeper and prolonged than what it was in the prior two recessionary periods.

Time Magazine thinks that extended unemployment benefits may increase joblessness

According to a recent story in Time Magazine, there is "a Limit to Compassion". The article figures that with extending the unemployment benefits for up to 99 weeks, congress and the president actually provides the jobless incentive to wait around for jobs---not taking low-paying jobs or a position that would require you to relocate.

Because there's evidence that the extensions are only prolonging joblessness. Today's unemployment rate remains high not because of mass layoffs — most of which happened early last year — but mainly because more people are remaining unemployed for longer periods. In academic parlance, the "exit rate" from the unemployment pool is only around 21%, compared with 34% during the last harsh recession, in 1982.

Unadjusted Unemployment Data - 2008 vs 2009 vs 2010

This short video shows the unadjusted initial unemployment claims statistics for the United States over the past several years. It utilizes ribbon charts to compare 2008, 2009 and 2010 to earlier years. You can see both the seasonality in the unemployment claims as well the big spike up in numbers seen in late 2008 and during all of 2009.

Do I pay income taxes on my unemployment income?

According to the IRS you better be ready to claim your unemployment income on your 1040 tax forms---What the government gives, the government takes away.

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Topic 418 - Unemployment Compensation

Unemployment compensation is includible in gross income. You must report unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. However, for 2009, the first $2,400 of unemployment compensation is excluded from income and should be excluded from the amount reported on your tax return.

Unemployment compensation generally includes any amounts received under the unemployment compensation laws of the United States or of a state. It includes state unemployment insurance benefits and benefits paid to you by a state or the District of Columbia from the Federal Unemployment Trust Fund. It also includes railroad unemployment compensation benefits, disability benefits paid as a substitute for unemployment compensation, trade readjustment allowances under the Trade Act of 1974, and unemployment assistance under the Disaster Relief and Emergency Assistance Act of 1974. Unemployment compensation does not include worker's compensation.

If you received unemployment compensation during the year, you should receive Form 1099-G (PDF) showing the amount you were paid. Any unemployment compensation received during the year must be included in your income, unless you contributed to the fund. See Below. In addition, for 2009, the first $2,400 of unemployment compensation is excluded from gross income.

If you received unemployment compensation, you may be required to make quarterly estimated tax payments. However, you can choose to have federal income tax withheld. For more information, refer to Form W-4V (PDF), Voluntary Withholding Request.

Supplemental unemployment benefits received from a company financed fund are not considered unemployment compensation for this purpose. These benefits are taxable as wages, and are subject to income tax withholding. They may be subject to social security and Medicare taxes as well. Supplemental unemployment benefits are reported to you on Form W-2 (PDF). For more information about supplemental unemployment benefits, see Publication 15-A (PDF) , section 5, page 12.

Unemployment benefits from a private fund (or, in some cases, public fund) to which you voluntarily contribute are taxable only if the amounts you receive are more than your total payments into the fund. This taxable amount is not unemployment compensation; it is reported as other income on Form 1040 (PDF).

For more information, see Unemployment Benefits in Publication 525, on page 27.

Maryland Unemployment Line Busy Signal

WBAL reports that thousands of jobless people in Maryland are spending hours on hold, with busy signals or having the system hang up on them.

The Baltimore news station's I-team's Barry Simms reports that Maryland doesn't have unemployment offices where people can go to for help---They must use the internet or call the number---For many it becomes a near full time job just to try and file their UI claim.

DLLR claims that 120,000 Marylanders were collecting unemployment and the plan to improve service levels are to hire an additional 25 people and to upgrade its computer systems.

Federal Cobra Subsidy Extended 6 more Months

Federal subsidy program for COBRA extended

Thursday, January 7, 2010 — Insurance Commissioner Wayne Goodwin announced Tuesday that the federal subsidy program for COBRA coverage for involuntarily terminated workers has been extended.

The extension allows the subsidy to remain in effect for an additional six months, for a total of 15 months worth of subsidy payments. The subsidy pays for 65 percent of the premium for both COBRA and mini-COBRA (see below for mini-COBRA definition) recipients who are involuntarily terminated from their jobs between Sept. 1, 2008 to Feb. 28, 2010. Workers are responsible for paying the remaining 35 percent.

Read the rest of the story at The Snap Online.

California's UI Fund To Run Huge Deficits

Click on Chart for a Larger Image

How bad are things in the state of California?

Well according to an Unemployment Insurance (UI) Fund forecast issued by California's Employment Development Department (EDD), the fund which is currently about $8 billion underfunded will be over $27 billion in the red by 2011!

That's almost $1,000 for every man, woman and child in the state of California---Or almost $2,000 for every worker in the state---It will likely be many many years before CA is able to dig out of this hole.

Extended Unemployment Insurance Benefits in Michigan

If you're confused by what UI extensions you may be elligible to receive if you're an out of work Michigander, you may want to spend 18 minutes watching this webinar.

It's a pretty dry presentation that explains how after you exhaust your regular benefits you get EUC (Emergency Unemployment Compensation), then EUC-Tier 2, then Extended Benefits (EB).

Michigan also has plenty of other webcasts for the unemployed worker located here.

How Many Weeks of Unemployment do New Yorkers Qualify For?

The State of New York realizes that it can be confusing for people to know just how many weeks of unemployment insurance benefits they can get while they are jobless.

That is why they published this handy chart and calculator to help you figure out how long the checks will keep coming (as long as you're actively looking for work).

You'll need to know the date of your Original Claim (OC).

How Many weeks of Unemployment Benefits do New Yorkers Get

*OC effective May 1, 2006 - May 12, 2008 26 weeks of regular UI

20 weeks of EUC-Tier 1
13 weeks of EUC-Tier 2
20 weeks of EB
14 weeks of EUC
(13 weeks Tier 3 and 1 week Tier 2)
6 weeks of EUC - Tier 4
99 weeks total

*OC effective May 19, 2008 - Aug. 18, 2008 26 weeks of regular UI

20 weeks of EUC-Tier 1
13 weeks of EUC-Tier 2
20 weeks of EB
14 weeks of EUC
(13 weeks Tier 3 and 1 week Tier 2)
93 weeks total

*OC effective Aug. 25, 2008 - Sept. 8, 2008 26 weeks of regular UI

20 weeks of EUC-Tier 1
13 weeks of EUC-Tier 2
17-19 weeks of EB (payable up to 2/28/10)
14 weeks of EUC (13 weeks Tier 3 and 1 week Tier 2)
73 weeks plus 17-19 weeks of EB based on last payable week

*OC effective Sept. 15, 2008 – Sept. 29, 2008 26 weeks of regular UI

20 weeks of EUC - Tier 1
13 weeks of EUC - Tier 2
14 weeks of EUC
(13 weeks Tier 3 and 1 week Tier 2)
6 weeks of EUC - Tier 4
79 weeks total

*OC effective Oct. 6, 2008 – Jan. 5, 2009 26 weeks of regular UI

20 weeks of EUC - Tier 1
13 weeks of EUC - Tier 2
14 weeks of EUC
(13 weeks Tier 3 and 1 week Tier 2)
73 weeks total

*OC effective Jan. 12, 2009 - Apr. 6, 2009 26 weeks of regular UI

20 weeks of EUC - Tier 1
14 weeks of EUC - Tier 2
60 weeks total

*OC effective Apr. 13, 2009 - Aug. 17, 2009 26 weeks of regular UI

20 weeks of EUC - Tier 1
46 weeks total

*OC effective Aug. 24, 2009 and later: 26 weeks of regular UI only

* An Original Claim's (OC) effective date is the Monday of the week in which the claim is filed.

UI = Regular Unemployment Insurance Benefits

EUC = Emergency Unemployment Compensation

EB= Extended Benefits

(Note: This data was accurate as of January 2010, it's possible that as time goes on more extensions are given to each group).

ADP Jobs Report shows an Increase in Service Jobs

This morning ADP reported that overall jobs were down 84,000 last month, but the service sector actually saw an increase in jobs.

Jake at economPic Data created the chart below that nicely shows how it has been well over a year since the service industry was a net producer of jobs on a month-on-month basis.

Unfortunately, manufacturing has steadily been dropping drops for years & years.


Click on Chart for a Larger Image.

If you wish to read the entire ADP December 2009 Jobs report, click here.