Specific Worker Initiatives
June 6, 2006
National Employment Law Project
• Unless Congress extends disaster unemployment benefits, over 80,000 families left jobless by the storms will be left destitute, without jobs and without any regular source of income to meet their rising living expenses.
Federal Disaster Unemployment Assistance (DUA) benefits have been the main source of income for 82,551 survivors still out of work after losing their jobs as a result of Hurricanes Katrina and Rita. According to a recent New York Times survey, most of the Louisiana families forced to evacuate after the storms have also depleted their limited savings. DUA benefits have provided limited relief to those whose state unemployment benefits were exhausted in February and March, as well as self-employed workers who never qualified for regular state jobless benefits. The 39-week program of DUA benefits expired for Hurricane Katrina-impacted families on Sunday, June 4th, and will expire for Hurricane Rita evacuees on June 24th.
• Rather than extend the repeal of the estate tax this week, which would benefit only a handful of wealthy individuals, Congress should ensure that jobless benefits are not interrupted for the families hit hardest by the storms.
This week, the Senate plans to vote on whether to repeal all, or nearly all, of the estate tax, which will cost $1 trillion in federal revenue while benefiting only a handful of wealthy families. For example, according to an analysis by the Center for Tax Justice, only about 90 families now pay estate taxes in Louisiana. By comparison, there has been limited movement in Congress to respond to the 80,000 families left jobless by the storms despite measures to extend the DUA program by 13 weeks proposed by both Republicans and Democrats (S. 3030/H.R. 5392). While the benefits ended on June 4th for those who qualified due to Hurricane Katrina, if Congress acts without delay, DUA benefits could be reactivated by the states as was required during the March 4th extension of the DUA program.
• Given the scope of the devastation caused by the storms, jobless benefits should be available for up to 52 weeks, as they were for workers in those states hit hardest by the last recession.
During the last recession, Congress authorized an extension of jobless benefits which provided up to 52 weeks of assistance to workers in 13 states hit hardest by the economic downturn (including California, Michigan, New Jersey and Pennsylvania and other large population states). These workers collected 26 weeks of regular state benefits, plus 26 weeks of federal extended benefits (called TEUC-X), thus totaling 52 weeks of assistance. In addition, airline workers received 39 weeks of federal extended benefits, not including their regular state benefits. In the case of the Gulf Coast families who lost their jobs through no fault of their own as a direct result of the storms, Congress should similarly ensure up to 52 weeks of jobless benefits. Prior to 1988, the DUA program automatically provided up to 52 weeks of disaster benefits, without requiring any additional extensions.
• Hurricane evacuees who depend on DUA are spread throughout the Gulf Coast, many far from their previous homes, making it especially difficult to find work and provide for their families.
Those impacted by the expiration of DUA benefits include 68,519 families from Louisiana, 13,203 families from Mississippi, and 1,000 from Texas and Alabama. A majority (60%) of DUA recipients from Louisiana (42,568) are now living out-of-state, including about 26,000 people who reside in Texas. The families face the greatest difficulties finding work, including stable housing and the challenge of matching their skills to a new labor market. Indeed, according to a special survey of the Bureau of Labor Statistics released last week, the unemployment rate for Katrina evacuees living out-of-state was still 25% in May, nine months after the storm. These are depression-levels of unemployment, which are more than five times the national average.
• A 13-week extension of DUA benefits would cost no more than $125 million, which would be paid for from FEMA funds that are already authorized.
A 13-week DUA extension of benefits would cost the federal government at most $125 million (assuming all current recipients received another 13 weeks of the average benefit amount, which is unlikely). Like the initial 13-week DUA extension passed in March, this funding would come from amounts already appropriated by Congress for FEMA, so it would have no impact on the federal budget.
• DUA benefits provide a limited, but necessary, lifeline to Hurricane evacuees.
Federal disaster benefits are extremely limited, especially when compared with the major economic and family hardship experienced by those who lost their homes and jobs as a result of the hurricanes. DUA benefits average just $104 per week in Louisiana and $208 in Mississippi—not even enough to cover the rising costs of food, housing and transportation in Louisiana and those urban communities around the nation where thousands of families have relocated. Despite the arguments of some who have consistently opposed any extensions of unemployment benefits, these benefits are so limited that no family would realistically turn down a job in favor of collecting jobless benefits.
• While many hurricane evacuees have found work, the Gulf Coast economy has still not fully recovered, which is why three months of additional DUA benefits would provide a necessary bridge to reemployment.
As Gulf Coast economies recover this year, the number of families depending on unemployment benefits has declined in recent months. Yet the Gulf Coast economy is still far from full recovery, which is why a three-month extension of DUA benefits is necessary for those now seeking work in the region.
While Louisiana’s economy has added 33,000 jobs since September, the state is still short 200,000 jobs, as compared to before the hurricanes. The state’s payrolls actually shrank in April, the most recent month for which data is available.
In Mississippi’s affected areas, the unemployment rate in Pascagoula is 10%, and in Biloxi-Gulfport it is 14%. While these figures are lower than peak unemployment rates last fall, they are still two or three times the national average.
Much of the job growth in the region to date has been in retail (which pays low wages) and construction (which requires specific skills). In three months, other parts of Gulf Coast economies will be in a more robust position. For example, the Louisiana Recovery School District is set to re-open in New Orleans in August and will hire hundreds of laid-off teachers. In Biloxi, a new temporary casino will open and reemploy families at a living wage.