Florida's Jobless Teeter On Fiscal Cliff

Dec 28, 2012


Tumbling off the fiscal cliff will immediately cut the economic lifeline for 119,000 Floridians who depend on extended unemployment compensation now funded by the federal government.

LIFELINE: 119,000 jobless Flordians would lose unemployment checks immediately in a fall from the fiscal cliff.

It would also mean an immediate increase in the payroll taxes paid by every American wage-earner. But the long-term unemployed will be especially vulnerable if Congress and White House negotiators are unable to reach an agreement to head off automatic tax increases and deep spending cuts by Monday.

Florida's unemployment compensation system -- stingy, by many assessments -- pays a maximum before-tax weekly benefit of $275 but the average benefit is around $230. The national average of state unemployment benefits is $302, according to the U. S. Labor  Department.

Jobless people use it to feed their families and to pay their job search expenses and it's all a steady trickle of spending that bolsters the economy. 

But preserving extended unemployment benefits, which kick in after the state's 23 weeks of benefits expire, may be a bigger task than just negotiating the fiscal cliff. Jorge Salazar-Carrillo, director of the Center of Economic Research at Florida International University, told the Palm Beach Post that unemployment is facing "a dire problem":

The country and the state cannot afford to keep paying extended weeks of benefits. The government takes the money from one pocket to put into another pocket, he said.

In fact, the federal government loaned the state money to pay its share of the benefits when the trust fund ran dry during the recession, and the state cannot afford to extend benefits either, he said.

The unemployment insurance tax is paid by employers. In 2012, Florida businesses paid between $120.80 and $432 on each worker. It was scheduled to go up, but the (Florida Chamber of Commerce) and other groups fought to save employers from increased taxes during the faltering economy.

Terminating extended benefits with the jobless rate so high would be a new frontier for the federal government. It has always maintained the emergency extended unemployment system when unemployment was at 7.3 percent or higher. In Florida, the rate is 8.1 percent and the  national rate is at 7.7 percent.

STATE BY STATE: Florida is seventh from the right.