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IDES: Long-term benefits phaseout isn't putting people to work

Published: Friday, April 25, 2014 1:15 a.m. CDT

STERLING – The Illinois Department of Employment Security on Thursday released data it says supports the agency’s previous contention that allowing emergency state benefits for the long-term unemployed to expire was a bad idea.

Congress decided to phase out those benefits at the end of 2013, immediately affecting 74,000 Illinois residents at the end of December. The federal program for long-term job seekers was not renewed after having been extended 11 times since 2008. For some recipients, the program had extended benefits for up to 47 weeks.

At the time of the benefits expiration, IDES had said the long-term unemployed needed more help, given circumstances unique to this post-recession economy.

“While today’s job growth allows most newly unemployed individuals to find work after several weeks, the long-term unemployed face additional hurdles,” IDES Director Jay Rowell said in a news release. “Ending this modest program based on a calendar date, rather than economic principles and job skills, could slow economic growth.”

An IDES analysis done shows that of those 74,000 Illinois residents cut off at year’s end, 64,000 still were jobless at the end of January.

Legislators in favor of phasing out the benefits maintained that the long-term assistance was incentive to turn down available jobs. The rationale was that, after the phaseout, the jobless would either take less desirable jobs or stop looking for work, either way causing them to drop from the jobless ranks. Rowell says the data doesn’t support that premise.

“This seriously undermines the perception that unemployment insurance discourages workers from finding employment,” Rowell said. “You should look at this analysis as confirmation that re-authorizing emergency unemployment is a cost-effective way to help families stay in their homes and put food on their tables. But you cannot look at this and say that people don’t want to work.”

Rivara says Illinois is uniquely equipped to do this type of analysis, because it is the only state that requires employers to provide monthly wage reports. This requirement was part of a state anti-fraud initiative to keep people from simultaneously collecting benefits and a paycheck.

An attempt to reinstate the benefits was resurrected this year in the legislature. In mid-March, the Senate approved a bill extending long-term benefits for 5 months, but it is expected to die in the House, IDES says.

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