Long-term jobless benefits expire today, which means an estimated 1.3 million people – including 19,000 Hoosiers – wont receive federal unemployment checks that average $1,080 a month in Indiana.
Brewing beneath it all is a likely political battle when Congress reconvenes in the new, midterm election year. Having let the emergency program expire as part of a budget deal, its unclear whether lawmakers have the appetite to start fresh.
Many economists wonder what this will mean for the nations recovering economy, but John Kessler, director of the Center for Economic Education at IPFW, believes things are much better than a year ago. For one thing, metro Fort Wayne reported a 6.7 percent unemployment rate in November, compared with a year earlier when joblessness hovered near 8 percent.
Before November, Fort Wayne had three consecutive months of unemployment declines. And while the number of Hoosiers losing their benefits is nothing to grin at, last December the state had far more people collecting long-term unemployment benefits – 122,000 recipients.
That is good news because most of those individuals have gone back to work, said Kessler. To go from more than 100,000 to less than 20,000 is a definite improvement.
Construction worker Cornelius Hill said tell that to the folks left behind.
If they dont have a check coming in, what are they going to do because they still have bills to pay, the 53-year-old Fort Wayne resident said. Hill was laid off this fall and was at WorkOne Northeast offices on Friday inquiring about his benefits. Its going to be sad, Hill said, as he padlocked his bike. What are people going to do?
Jennings Lohr lost his job at a Kendallville company this month. He hasnt received an unemployment check yet but said at least he can expect one.
I heard some ladies talking about losing their benefits while I was in there, said the 33-year-old iron worker who also visited WorkOne on Friday. Im supposed to receive my check in a month, I guess.
Joe Frank, spokesman with the Indiana Department of Workforce Development, said the agency provided alerts on its website and other correspondence that long-term jobless benefits were ending, so no one should feel caught off guard.
For several weeks now weve been doing that, he said. Were encouraging people to go to their local WorkOne office to speak with career counselors, as well as visit indianacareerconnect.com. People have been prepared for this.
Long-term unemployment refers to individuals who have been jobless for up to 63 weeks.
Kessler said the recession should have taught workers how to plan ahead.
If its one thing weve learned, its that anyone can lose their job, he said. So, that means you have to have money for a rainy day, dont acquire a lot of debt and live paycheck to paycheck.
Workers who find it difficult locating work are the ones stuck in a skills gap, Kessler said.
The job market changes, so obviously you cant go from manufacturing to working in a hospital, he said. If the economy is asking for a different kind of worker, you have to go back and get the required skill set.
For now, Kessler said its difficult to say how the local and state economies will be affected by the situation.
Started under President George W. Bush, the benefits were designed as a cushion for the millions of Americans who lost their jobs in a recession and failed to find new ones while receiving state jobless benefits, which in most states expire after six months.
An additional 1.9 million people across the country are expected to exhaust their state benefits before the end of June.
Gene Sperling, the director of the White Houses National Economic Council, said Friday that President Barack Obama wants an extension as soon as Congress returns next month, warning the abrupt cutoff will deliver a blow to the U.S. economy.
It defies economic sense, precedent and our values, Sperling said.
But Obama has no quick fix. He hailed this months two-year budget agreement as a breakthrough of bipartisan cooperation while his administration works with Democratic allies in the House and Senate to revive an extension of jobless benefits for those unemployed more than six months.
Senate Democrats and some Republicans plan another push in 2014. Sens. Jack Reed, D-R.I., and Dean Heller, R-Nev., have introduced a bill offering a similar three-month extension, and Senate Majority Leader Harry Reid, D-Nev., has promised to bring it up.
But as with much in Congress, an extension is no sure thing.
The Associated Press contributed to this story.