Shrinking Support for California’s Unemployed

Beginning this Sunday, some of California’s job seekers will no longer be able to receive key emergency unemployment benefits, placing additional strain on workers who have already seen their benefits cut within the last year. These emergency benefits, called “Tier 4” benefits, are provided through the federal Emergency Unemployment Compensation (EUC) program, which provides different tiers of emergency benefits to workers based on the economic conditions of the state in which they work. This emergency aid program provides additional benefits to unemployed workers who have exhausted their regular state unemployment insurance, thus serving as a vital lifeline for the long-term unemployed and their families. Unemployment insurance benefits lifted nearly a million children out of poverty in 2009, at the height of the Great Recession.

As successful as the EUC program has been, it is designed to be temporary, with benefits phasing out when the economy improves. Tier 4 benefits give up to 10 weeks of additional unemployment benefits to job seekers in states where the unemployment rate averages 9 percent or higher for three months in a row, but eligibility ends when unemployment falls below that threshold.

The end of Tier 4 benefits for workers in California is a sign that our state’s economy is improving, but it isn’t exactly time to break out the champagne. The Employment Development Department estimates that thousands of unemployed workers in California will lose out on benefits because the state no longer qualifies for Tier 4. This is troubling given that California’s job market is still weak, especially for the long-term unemployed. This past June, nearly one-third of California’s unemployed workers had been out of work for at least a year, and more than 40 percent had been unemployed for at least six months. At no other point in nearly the past two decades has long-term unemployment been this common. For these workers, the economic recovery is not yet a reality, and they will continue to face a weak job market for months to come. At the current rate of job growth, California will not recover the jobs lost in the Great Recession until July 2015.

Furthermore, aid for unemployed workers has already been reduced because of the automatic cuts to federal programs that took effect on March 1. These cuts, known also as “sequestration,” reduced federal unemployment benefits for more than 400,000 jobless Californians by nearly 18 percent. While the economy is improving, services are being cut for precisely the group that is being left behind in this recovery.

Stay tuned for a deeper look at this and other challenges that California’s workers face as our state slowly emerges from the deepest economic downturn in generations. This Labor Day, we will release our annual analysis of the state’s economy and job market, examining where the state stands and what the current recovery means for California’s workers.

— Luke Reidenbach