Georgians who lose their jobs after July 1 can expect one less week in unemployment insurance benefits – maybe enough to make a car payment, pay for the family’s prescriptions, or simply put food on the table. And it’s not because the economy is so much better. It’s because Georgia lawmakers decided struggling families should bear most of the burden for repaying a federal loan that helped the state cover unemployment claims during the height of the recession.
In fact, the benefit cut is likely to harm the economy.
Due to changes the legislature made in unemployment insurance laws last year to help repay the federal loan, Georgians seeking unemployment benefits after July 1 should only expect a maximum of 18 weeks of state-funded benefits instead of 19. This makes Georgia the state with the shortest duration for such benefits in the nation. Federal benefits may offer unemployed Georgians some relief after 18 weeks, but they are set to expire at the end of this year.
The legislature cut the maximum benefit from 26 weeks to a range of 14 to 20 weeks, depending on the unemployment rate near the time a laid-off worker files his or her claim. Since the unemployment rate in Georgia has declined, the maximum will drop to 18 weeks after July 1. Meanwhile, the same law gave Georgia employers a tax cut that will deprive the state’s unemployment insurance fund of more than $400 million in 2013.
Once unemployed Georgians’ state benefits are exhausted, they may be eligible for additional weeks of benefits through federal Emergency Unemployment Compensation. Those federal benefits, however, expire after December 28, 2013, about 27 weeks from now.
This reduction in the lifeline for unemployed workers is bad news for Georgia’s fragile economic recovery. As of May, 177,600 Georgians had been unemployed for more than 27 weeks and as of March, almost 16,000 Georgians collected benefits for more than 18 weeks Unemployment insurance, which replaces about 31 percent of the average weekly wage in Georgia, helps these workers keep paying their rent or mortgage and meet other basic needs. It also strengthens the economy by giving unemployed workers at least a little buying power.
Now that unemployment benefits will run out sooner, some of Georgia’s unemployed, and Georgia’s economy as a whole, will be left with one less leg on which to stand.