Don’t believe your unemployed friends at the gym

I tend to be all business at the gym and, for that reason, not terribly social. Still there are two people that I’ve become friendly with. The first – an older and recently retired gentleman – I met when he shared just how amazed he was that someone else at our gym read The New Yorker. The second is a pudgy Asian guy who is about my age and also unemployed. I don’t remember how we met.

I see the unemployed guy a few times a week. He always asks after my job search and laments the state of his. (He’s an engineer who’s been unemployed for about seven months.) We might then discuss when the job market will pick up again (mid to late 2009, if we’re lucky) or what other types of jobs I could pursue (sales or something trademark-related). He’s dead set on working as an engineer, so I suggest companies and geographical areas where he might have more luck.

Today we happened to be on adjacent elliptical machines. After breezing through the usual topics and then discussing why the government is better than the private sector (mainly job security), we got onto the topic of Unemployment Insurance. He had recently reached the 26-week point and noticed the balance in the history section of his account was $0. But he’s still receiving payouts.

As I understand the system to work, the original term for which the jobless could expect payouts was 26 weeks. It was extended by 13 weeks and then, on November 20, by another seven weeks. So what that means to me is that he (and I) can make claims and receive payouts for 46 weeks. After that, barring another extension, both of us would be out of luck.

His understanding is a little different than mine. As he explained it, the extensions don’t mean an unemployed person receives more money. They allow for that person to collect the same amount of money over a longer period of time (46 weeks as opposed to 26 weeks). For example, an unemployed person who collects the maximum in New York ($405/week) will collect a total of $10,530 after 26 weeks. The extensions allow that person to spread that amount over a time period up to 46 weeks. He also believes that any money collected beyond the 26 weeks puts your account into the negative. So once you’re employed, you have to repay this.

I think he’s wrong, and here’s why. First of all, the system as he understands it could potentially leave the unemployed worse off. If I were to voluntarily take less money each week to extend the term of the payouts and then find a job before maxing out my benefits, I’d end up with less money. It would make more sense to take the maximum payouts each week and bank whatever I don’t use for when the benefits run out (not that there’s ever extra money). There’s one line of reasoning that makes a tiny bit of sense. People tend to spend what they have, so reducing the benefit and extending the term would help them manage their budget so they’d have money for longer. But that can’t possibly be enough reason to set up Unemployment Insurance this way. His assertion that an unemployed person’s account goes into the negative after 26 weeks is also faulty. Unemployment is funded by a tax on employers not employees.

Still the possibility scared me enough to look into it further. I found nothing to substantiate his understanding of how the unemployment extensions will work. It simply seems that New York state hasn’t updated the wording on the site (except to add a separate page about the extensions) or adjusted its online system. My account still shows that unemployment lasts for 26 weeks too. Maybe the extensions require a claimant to file again. That’s a question I’ll have to ask.

For your reading pleasure, here’s the wording about the extensions on the NYS Department of Labor site

“On November 20, 2008, Congress passed legislation to extend the Emergency Unemployment Compensation (EUC) allowing an additional seven (7) weeks of benefits, for a total of 20 weeks of EUC. This 7-week extension is referred to as Extended EUC, and is based on New York State‚Äôs unemployment rate. The first week of benefits that can be paid under this 7-week extension is the week ending November 30, 2008. Unemployed individuals may claim benefits for this week from Sunday, November 30, 2008 through Saturday, December 6, 2008 by using this website or by calling our toll-free Tel-Service number at 1-888-581-5812 (New York State residents), 1-888-864-9920 (out of state residents), or 1-877-205-3119 (TTY/TDD equipment users).”

“Under current legislation, new claims for Emergency Unemployment Compensation (EUC) can be initiated through the week ending March 29, 2009. No EUC can be paid for any week that begins after August 30, 2009. The weekly benefit amount paid for EUC is the same amount the individual received for regular unemployment benefits.”

I did discover one thing that concerns me. My 46 weeks would extend past the August 30 cutoff date. I could theoretically lose a few weeks of unemployment. It may end up a moot point if the job market worsens and Obama extends benefits. I’ll still be calling the Department of Labor bright and early on Monday to find out just what the deal is.

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2 Comments

  1. robert wrote:

    There are still high paying jobs on certain job sites, here’s 3 from about.com’s top ten job sites-

    http://www.linkedin.com (professional networking)
    http://www.indeed.com (aggregated listings)
    http://www.realmatch.com (matches jobs based on your skills)

    good luck to those looking.

    Friday, January 2, 2009 at 8:00 pm | Permalink
  2. Dalilama wrote:

    Norm, don’t listen to that moron, you may have just found out the reality behind why he is unemployed and it may have nothing to do with the economy… As usual, having been there way too long recently, I can give you firsthand experience on this subject. I had my benefits extended after the first wave of extensions passed nationally. The instructions from the unemployment office were to just continue to claim benefits until they expire. I did, and had no interruption. Nothing changed in terms of the amount of benefits or me having to owe anything back now that I have a job.

    This guy’s interpretation of the “EXTENSION” is very mistaken, Norm. I suggest you stick with your initial plan of keeping to your workout instead of wasting time with this guy, he will only fill your head with worthless drivel and take any enjoyment out of the extra time you have on your hands while being unemployed…

    Saturday, January 3, 2009 at 8:59 pm | Permalink

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