States Cut Down Time For Jobless Benefits Receipt
MICHEL MARTIN, host: I'm Michel Martin and this is TELL ME MORE from NPR News. My thanks to Allison Keyes for sitting in while I was away. Coming up, Facebook CEO Mark Zuckerberg said recently he hopes to one day open his site to young people under 13 years old. What do we think about this? The parents in our weekly roundtable weigh in later in the program. But first, we've talked a lot on this program about the frustration and pain of unemployment.
The federal government said there were over 420,000 new claims for unemployment benefits just last week. According to the Department of Labor, that figure is up by 10,000 claims from the previous week and in some states the frustration is growing as politicians cut and cap benefits for the jobless. One of those states is Michigan, where the unemployment rate is above 10 percent. Michigan's Governor Rick Snyder recently signed a bill that reduces the amount of time someone can claim state unemployment benefits from 26 weeks to 20 weeks. That's starting next year.
Florida, Missouri and Arkansas have passed similar laws. We wanted to talk more about what this could mean, so we've called Rick Nivison. He's a resident of Pittsford, Michigan. He's currently receiving unemployment benefits but they're about to run out. He's with us from the studios on the campus of Michigan State University in East Lansing, Michigan. Welcome, Rick, thanks so much for joining us.
RICK NIVISON: Thank you for having me.
MARTIN: And for additional perspective we've also called upon Marilyn Geewax, NPR's senior business editor. She's with us in our Washington, D.C. studios. Welcome back, Marilyn, thanks so much for joining us.
MARILYN GEEWAX: Hi.
MARTIN: Marilyn, just - if you could just set the table for us. Why are things so bad in Michigan?
GEEWAX: Well, we've really got a bad unemployment problem nationally. We've got 9 percent unemployment and about 13.7 million people unemployed, but in Michigan it's particularly bad, and a big part of that was just the downturn in the auto manufacturing. When the recession kicked in about three years ago, Detroit's Big Three auto makers started eliminating tens of thousands of hourly jobs and it really hurt Michigan a lot. So whenever you lose high paying jobs in the auto industry, it starts to cascade down.
It knocks out jobs for all kinds of suppliers, for the restaurants, and now...
MARTIN: Construction, for example. If you're not working, you're not going to build a house.
GEEWAX: And you're not going to have a new home, you're not going to have a car dealership. So a lot of those things cascaded. But now I want to point out that right now the auto industry is kicking up a bit so they're starting to hire again to fill some second shifts, but the wage level is very low. It's about half what people used to make, so this trickle down effect will be really subdued even when hiring does pick up. It'll still be tough in Michigan.
MARTIN: Rick, could you tell us your situation? What area were you working in before you started drawing unemployment?
NIVISON: Okay, I had a union job. I drove a union-ready mix truck for 35 years, and once the economy went down, people quit building and ultimately I lost my job.
MARTIN: I'm sorry about that. I know that's tough. How have you been making it since then?
NIVISON: I have been drawing unemployment since last August. I also had a part time job for approximately two years, and that was through a local school system and their budget constraints - I wasn't able to continue working there last year so that's when I started drawing unemployment. I have drawn my full 26 weeks from the state of Michigan and now I'm on a federal extension and that's going to expire in August.
MARTIN: This August?
MARTIN: Okay. Do you mind if I ask how much do you get for that unemployment and how does that compare to when you were working?
NIVISON: My unemployment right now is less than $450 for two weeks and compared to what I was making when I was working, that's just a drop in the bucket.
MARTIN: And that must be pretty scary, to face the loss of benefits. Do you have any idea what you will do when your benefits end?
NIVISON: No, I don't. I am looking to find a job right now, but another one of my problems is I'm 54 years old and all I have is a high school education. I got a union job right out of high school and I'm not educated in a lot of the technical type of stuff that they have out there today. The programs that the government was running to retrain people that had lost their jobs, they've now cut those funding, so those programs don't exist, and it's a bad situation because I don't feel somebody's going to hire me and take a couple years to train me to do a job that basically I'm only going to be working for another six years.
So I am caught in-between a rock and a hard place.
MARTIN: Marilyn, what do you make of Rick's assessment? Does that sound about right to you?
GEEWAX: Yes, in Michigan, yeah, the unemployment rate is 10.2 percent, and it's 9 percent nationally. So it's horrible nationally but it's really horrible in Michigan, and for older workers too, as he says, it's tough to retrain.
MARTIN: Older workers are more likely to be out of work for longer...
GEEWAX: For longer. That's been the trend throughout this recession.
MARTIN: So why are states cutting these benefits?
GEEWAX: It's really just a budget issue. There have been so many people who have been unemployed for so long that states are running out of money, so remember that these benefits are funded by the state and federal unemployment insurance taxes, and that's paid by the employers, so the initial benefits are paid by the states, usually 26 weeks, but when that runs out, as he said, there's these federal extended benefits. They can be up to 99 weeks in some cases, but you know, this unemployment crisis, Michel, has gone on so long that the funding is just running out.
So the states are facing these severe budget squeezes and they don't want to raise taxes on businesses to replenish their unemployment benefits funds, so they feel like they can't raise taxes on business but they don't have money. The alternative is just to cut those benefits, so some of these states, as you said, are cutting back to just 20 weeks, but for a person like this in Michigan, that's really tough.
MARTIN: If you're just joining us, you're listening to TELL ME MORE from NPR News. I'm Michel Martin. We're talking about state cuts to unemployment benefits and how that will affect or is now affecting jobless Americans. With us is Marilyn Geewax. That's who was talking just now. She's NPR's senior business editor. We're also visiting with Rick Nivison. He is a resident of Pittsford, Michigan and he's currently receiving unemployment benefits but they're scheduled to run out in just a little while. Rick, can I ask you, how are your spirits?
NIVISON: Pretty good. You've got to have a good outlook. If you don't, you're going to have problems.
MARTIN: What kinds of things are you doing to look for work? And I understand that after a while you must feel like you've been plowing the same ground. But while you're receiving unemployment benefits, if I have it right, you're supposed to document that you're continuing to look. So what do you do? What kinds of things are you doing?
NIVISON: Every time I hear that somebody's possibly hiring, I drive down there to see if I can put in an application. I continually look through the want ads in the daily newspapers, but the bad thing with us is I live in a rural area and in order to go anywhere you have to drive 25 miles just to go to the gas station. So that puts another burden on people. There's no public transportation or anything like that down where we live. So gas at $4 a gallon, you're basically spending all your money just looking for another job.
MARTIN: How are you keeping your spirits up? And you sound good, by the way, and I admire you because it must be hard keeping your spirits up...
NIVISON: Oh, thank you.
MARTIN: When you've been working, you know, dealing with this situation for quite a while. How are you keeping your spirits up?
NIVISON: My family, they stand behind me. I have a daughter. She's graduated from college and she's a registered nurse so she got a good job there's a demand for. My wife does work, so she gets up and goes to work every day. And she stands behind me also. So my family supports me 100 percent.
MARTIN: I wanted to ask you about the information that Marilyn was talking about, which is the fact that the states don't want to raise taxes right now because the economy's already in such a fragile state that they feel like they can't raise taxes, but they're running out of money so they have to cut somewhere and that hits somebody like you. And when you hear that, I'm just wondering, how do you assess this? I know it's hard to put yourself in that place, but if you were in the position of these policymakers, what do you think you would do?
NIVISON: Well, first of all, instead of bringing in cheap jobs to the area, which these jobs are being placed in these temporary agencies to where you go and you're a temporary hiree for 90 days to become permanent. And at the end of your 89 days they'll terminate you and hire somebody else so that you don't become full time and receive benefits.
If they would spend more time on bringing in living wage jobs back to this area, we wouldn't need unemployment.
GEEWAX: I just wanted to say one thing, that one of the problems that we're seeing in the economy is that the longer a person is out of work, the less likely it is that they will find a job because employers, you know, they've got their pick of workers. There are so many unemployed people out there, they want people with the freshest skills and the latest coming right out of an existing job to transfer in.
So one of the things that policymakers are having to take into account here, is whether or not in the long run it does people much good by extending benefits as long as 99 weeks. There is some line of thought out there that it's actually the better thing for people to get cut off after a while. And then you have to make hard choices like maybe you need to move to a different city.
And I realize how really hard that is in Michigan because the home prices being so depressed. But just getting more and more unemployment benefits and dragging it out isn't necessarily something that results in a job for the workers. So, you know, policymakers are weighing that. Should they really take some of this money from the federal government?
And instead of extending unemployment benefits - using that as tax cuts to attract businesses, the kind of thing that he's talking about - maybe using that money to find different ways to bring jobs into an area. And it's really quite a debate in Congress. It's not clear how it'll play out, but there are questions about whether or not extending unemployment benefits is really in the best interest of workers.
MARTIN: Rick, before we let you go, just, I want to give you the last word here. What would you want the people to - who are having this debate right now - to know?
NIVISON: People have to have a little bit of pride, they have to look out for each other. Nobody wants to be on unemployment. It's not fun. I would rather have a job than to be going through what I'm going through. So they have to realize that they have to treat people like people. I'm not a number. I'm not a statistic on a piece of paper. I am a person. And I need to continue.
MARTIN: Rick Nivison is a resident of Pittsford, Michigan. As you just heard, he's been looking for work for quite some time, and he was kind enough to join us from the studios on the campus of Michigan State University in East Lansing, Michigan. Rick, we wish you the best. We're going to keep a good thought for you.
NIVISON: Thank you very much.
MARTIN: Also with us, Marilyn Geewax. She's NPR's senior business editor. She was here with us in our Washington, D.C. studio. Marilyn, thank you also.
GEEWAX: Always great to join you, Michel. Transcript provided by NPR, Copyright NPR.