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Federal Emergency Unemployment Ends for 90,000

12/11/2012

For Immediate Release | Contact: Greg Rivara, Phone: (312) 814-0095 (pdf version)

EUC Ends Dec. 29; Regular Unemployment Continues

IDES Faces 20 Percent Federal Budget Cut

CHICAGO - An estimated 90,000 people who worked in Illinois will no longer receive unemployment insurance when the federal Emergency Unemployment Compensation program ends Dec. 29, the Illinois Department of Employment Security (IDES) said today. The state's Regular Unemployment program continues.

Once the EUC program ends, an additional 2,800 individuals each week will complete the regular state unemployment insurance program and not have access to the federal EUC. Every $1 in unemployment insurance generates $1.63 in economic activity because the dollars are quickly spent at neighborhood businesses.

Further, IDES is federally funded and funding is partly tied to the number of people collecting unemployment. That number will fall because federal EUC ends ($16M cut) and there are fewer people collecting the state's regular unemployment ($11M cut). When combined with potential cuts from the fiscal cliff ($17M cut), IDES' budget could be cut $44 million annually, or about 20 percent. These cuts come at a time when the number of claims remain 38 percent higher than prior to the recession.

To live within its budget, IDES already has non-scheduled 216 intermittent employees, consolidated eight offices and vacated 10 outpost locations shared with partners. The federal cuts might necessitate further service reductions, including additional office consolidations.

Illinois businesses pay into the Unemployment Insurance Trust Fund to provide for the state's regular unemployment program, which lasts 25 weeks for individuals who first claimed the benefit in 2012.

After regular unemployment, individuals graduated to the federal EUC, which was divided into Tiers I, II, III and IV. Collectively, they provided up to 53 weeks of unemployment insurance. Congress enacted the EUC tiers at various times under Presidents Bush and Obama. The federally funded Extended Benefits (EB) program provided the final 20 weeks of support. EB expired earlier this year after specific thresholds were met, including a falling unemployment rate. The EB thresholds and the EUC ending date were written into federal law.

The unemployment rate identifies those who are out of work and seeking employment. A person who exhausts benefits, or is ineligible, still will be reflected in the unemployment rate if they actively seek work.