As if the Unemployed Didn't have Enough to Worry About

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The March deadline has passed, neither the Republicans nor the Democrats have blinked – yet – and those $85 billion in automatic spending cuts that fall under the ominous rubric of “sequestration” will now begin to go into effect.  If the sky is now plunging to earth, as so many people seem to think it is, the only slim bit of comfort is the rather vague promise that the majority of us won’t actually feel any of the impacts until perhaps a month from now. Exactly how these sequestration cuts will manifest remains anybody’s guess. JVS does rely on federal government funding for certain of our programs, and if that funding dries up, it’s not inconceivable that the programs – our Veterans First program, for example - could be affected as well.

So while we’re certainly concerned and watching this very closely, the clients we serve are probably worried as well. If not, they should be.

In a briefing paper titled “The Sequester’s Devastating Impact on Families of Unemployed Workers and the Struggling Unemployment Insurance System,” the National Employment Law Product (NEPL) paints a very grim picture. The Unemployment System is among the federally funded programs that are subject to an across-the-board spending cut of about 5 percent over the course of the fiscal year. In addition potentially massive layoffs, those already unemployed will see their benefits reduced.

NELP estimates that 3.7 million people might feel this effect. State UI payments will not change and numerous former federal workers and former servicemen are exempt from the sequester. Still, there are 2 million workers currently receiving Emergency Unemployment Compensation (EUC) and Extended Benefits (EB) – the federal benefits that allow additional funds once state benefits run dry. According to the U.S. Department of Labor, the number of affected workers could grow to 3.8 million by June, the  end  of the fiscal year.

“Were the sequester to run tis full course during this budget year, the U.S. Department of Labor estimates that families could lose an average of more than $400 in EUC benefits or a total of over $2.3 billion,” the NELP briefing paper states.

The paper goes on to talk about the added burdens sequestration poses to state agencies and cuts to training and other reemployment programs.

Like I said, grim stuff.