Unemployment Benefits Dwindle
MICHEL MARTIN, HOST:
I'm Michel Martin and this is TELL ME MORE from NPR News. Later in the program, we will speak with a Christian leader who's led his church to rethink both its politics and its worship. It's the Reverend Cecil Williams of San Francisco's Glide Memorial Church. He and his wife, who's also a church leader, will join us for a Faith Matters conversation in a few minutes.
But first we want to talk about the new jobs numbers, what they mean for the economy and for people who are still searching for work. The Labor Department reported today that the unemployment rate inched down to 7.6 in March. That sounds like good news, but the not so good news is that just 88,000 jobs were created. That's well below economists' expectations. And this comes as many people's unemployment benefits are also drying up.
We wanted to talk about this once again so we've called Marilyn Geewax. She's NPR's senior business editor. And we also reached out to listeners on Facebook to find out more about how people who have not had jobs for a while are coping with this. With us now is Mike Rivas. He was laid off more than eight months ago and his unemployment insurance just expired last weekend.
Welcome to you both, Mike and Marilyn. Thanks so much for joining us.
MARILYN GEEWAX, BYLINE: Hi, Michel.
MIKE RIVAS: Thanks for having me.
MARTIN: Marilyn, first of all, let's just get to those numbers. Those 88,000 jobs in March was the fewest in nine months. Any idea why?
GEEWAX: Ouch. This one just hurts. It's not entirely clear what exactly happened but we can see there were a lot of job losses related to government work going - being withdrawn, especially the Postal Service lost a lot of jobs. So just the federal jobs alone, that was down 14,000.
But it just seems like everything took a swoon in March. Was it bad weather? Was it bad attitude? Was it sequestration? Maybe Congress created some uncertainty. Whatever is happening out there, it's not good for workers. You know, we had been averaging something like 200,000 jobs a month for the last several months, four or five months. It was looking pretty good.
Really, over the past 12 months we've had about 169,000 jobs each month. Well, all of a sudden, we come into March and, gosh, you know, economists were expecting it to be close to about 200,000 new jobs and we got only this 88,000. That's a real swoon. Now, one thing that I could say is every year in spring, it seems like the last three years or so, we always have this kind of spring dip.
And maybe we'll get over it. So it's hard to tell if this is a trend but for now it hurts.
MARTIN: Many people who have been unemployed for a while are now seeing their benefits expire. Why is that? Is that related to the sequestration, those across-the-board job cuts? Or is there something else at work here?
GEEWAX: Yes, this is a combination of several factors that will be hurting people who depend on those unemployment checks to help them out. We've got an awful lot of long-term unemployed people. Long-term means you've been looking for a job for more than six months. Now, back in 2008, Congress realized that the economy was turning south, so they started supplying federal benefits to help extend what the states will give you.
Typically, the states control the unemployment programs and they would give you six months worth of benefits. So the Feds stepped in, they extended it. During the worst of the recession it got all the way up to 99 weeks of help. Well, last year that cut that back to 73 weeks maximum. And so it's been receding. Different states have different limits.
But then what happened this year - just in March, you know, we had that terrible process called sequestration, which means government cuts across the board. So even if you are still getting a government check, it will shrink between now and September by as much as almost 11 percent.
MARTIN: Mike Rivas, you were laid off last summer. And since then, as I understand it, you moved your family from California to Arkansas. Why? I guess family there and also cheaper cost of living.
RIVAS: Yes. Yes.
MARTIN: Your benefits just expired last weekend. Do you know why?
RIVAS: The regular benefits were at 26 weeks' length and at the end of those 26 weeks the state automatically files for an extension. And I got the first extension. And that extension just expired this past Saturday. I'm hopeful that maybe there will be another extension, but I don't control it. The state automatically files it for you. So we're just kind of up in the air, you know?
MARTIN: Do you mind if I ask what those benefits meant to you while you were getting them? What did you use them for?
RIVAS: It helped cover the cost of living. You know, one of the things that is really important to us is healthcare and, you know, being out of work meant that we didn't have regular coverage through the company. So we had to go to Cobra benefits and the Cobra benefits - it was costing us about $2,000 a month. And the benefits that we were getting were covering most of that, but even then it wasn't covering everything.
And that meant that we still had to pay mortgage and food and gas, electricity, etc.
MARTIN: Your unemployment benefits mainly helped keep you, your wife, and you have a three-year-old...
MARTIN: ...as well insured. Now that those benefits aren't coming in, what are you going to do for healthcare? Do you know?
RIVAS: Well, we're kind of looking at our finances. We're going to have to shift things around. The healthcare is very, very important to us. You know, there's a couple of circumstances that we have in our family where, you know, we need that healthcare. Prescription coverages, for example.
MARTIN: Even with the three-year-old. Of course, you know, there are regular visits to the doctor. You need immunizations. You need regular, you know, health checkups.
MARTIN: As well as you and your wife certainly both need to be healthy if you're going to work. And your wife is working, as I understand it, but she's a freelancer.
RIVAS: Yeah. And, you know, we were really lucky in that, you know, she had a pretty steady contract there beginning around the time that I lost my job to the end of the year. And for the last three months things were really tenuous and, you know, again, we're really lucky in that things have really picked up. In fact, she's got more work than she can handle for the next month and a half or so.
But, you know, it's one of those things where you're kind of in the dark. You know, you're going 180 miles an hour into a blind, smoky curve, you know?
RIVAS: You don't know what's inside that cloud of smoke.
MARTIN: What's your profession?
RIVAS: I've worked in higher education administration for 14 years.
MARTIN: So you don't have any sense of what your prospects are there. That doesn't appear to be a growth area.
RIVAS: Well, you know, there's a lot of colleges and universities here in Arkansas, the central - in the river valley area where I live. But, you know, here in Arkansas it's very much a community and I'm pretty new. I'm still kind of an outsider. I'm working hard at it and I was working at a pretty high level in Southern California. I was vice president of the college that I was working at. But I have to look for whatever I can find.
And I haven't had a lot of luck here in Arkansas. I have to look nationally too.
MARTIN: If you're just joining us, we're talking about those new jobs numbers and also the fact that unemployment benefits are expiring for many Americans like Mike Rivas. With us is Mike Rivas. He's just been describing his situation to us. Also with us once again, NPR senior business editor Marilyn Geewax, who we turn to frequently to explain situations like this.
Marilyn, a couple of things, you know, first of all. Is somebody like Mike Rivas even counted in the jobless numbers at a point like this?
GEEWAX: Yes. The way the government counts unemployed people, you have to meet three standards. You have to not have a job. You have to be actively looking for work, and you have to be available to take a job. So even if your benefits have run out, but if you meet those other three standards, well, then you're considered unemployed.
MARTIN: So even though it's been more than six months, he's still actively looking.
MARTIN: So he's still counted.
GEEWAX: He is counted.
MARTIN: But the other question is that, you know, we talk about the domino effect. With somebody like Mike Rivas, he was getting unemployment benefits. Those benefits are suddenly cut off. Is there a knock-on effect that other businesses are affected?
GEEWAX: This is something that a lot of economists are concerned about. Many people consider unemployment benefits to be good for the economy as a stimulus. That is, people who otherwise might be losing their home because they can't make the mortgage payment, they can't make the rent, they get a check from the government and now they can get through the month.
So they don't become - add to the foreclosure crisis. They can go to the grocery store. They can buy some groceries and that helps the store on the corner. So when you cut off those benefits, as we've seen, as they are being withdrawn with these cuts in the federal extensions - and also this sequestration that will shrink the size of the checks - so you'll have fewer people getting the checks and those who do will have less money to spend. And there are certainly economists who say that will ripple through the economy and hurt consumer spending.
We may be seeing a little bit of evidence of that already. In this March jobs report, retailers cut back on hiring and that may be a sign that they are concerned about consumer confidence going forward.
MARTIN: Marilyn, you described, earlier, that benefits had been extended, but now they are being cut back. Is that for philosophical reasons or for budgetary reasons? And what's the thinking behind that?
GEEWAX: Some of both. Congress does want to cut government spending, so that's part of it, but also, many economists think that the longer you extend these benefits, sometimes, people don't look for work as aggressively or they aren't willing to make changes like learning new skills or moving to a new city. So some economists believe that it's good to cut extended benefits.
MARTIN: Mike Rivas, as you've already described, you've taken a lot of steps to address your employment situation to take care of your family, as we said, you know, moving to a cheaper cost of living environment, moving closer to family. You're aggressively looking for jobs. Anything else that you would want people to know, particularly policymakers, as they're talking about these issues right now?
RIVAS: I think the thing that really sort of prompted me to contact you guys was the comment section on the Facebook page and how many people look at this situation posted. It's a very complex situation and people look at it quite simplistically. You know, there's jobs out there. Just get out there and, you know - I'm going to look very aggressively for jobs that are going to pay me. You know, I have to pay back student loans and we have to look at something that's going to be able to provide for us.
MARTIN: Mike Rivas, we're going to keep a good thought for you. Thank you so much for contacting us and talking about...
RIVAS: Yeah. I appreciate it.
MARTIN: ...your situation.
RIVAS: Thank you so much for the opportunity.
MARTIN: Mike Rivas was laid off last summer. He's looking for work. He is trained as a university administrator. He's currently living in Pattsville, Arkansas, and he joined us on the line from there. Here with us in our Washington, D.C. studios, Marilyn Geewax. She's NPR's senior business editor and she often talks with us about issues related to the economy and personal finance.
Thank you both so much for speaking with us.
GEEWAX: You're welcome, Michel. It was great to be here.
RIVAS: I appreciate it. Thank you for having me on.
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