Jobless trends trouble state labor chief

Posted Oct. 21, 2008, at 9:03 p.m.
Last modified Nov. 21, 2010, at 7:09 p.m.

AUGUSTA, Maine — In September, more Mainers were out of work and looking for work than live in Waldo County.

An estimated 39,800 workers were unemployed last month — part of a trend Labor Commissioner Laura Fortman said is troubling.

“When we compare initial claims in September to initial claims in 2007, it is up 58 percent this year,” she said. “We have been seeing about 5,000 new claims a month for the last few months.”

Fortman said September usually has one of the lowest numbers of initial unemployment claims. She said since the summer, there has been an upward trend in claims, and that once receiving benefits, workers are staying on unemployment insurance longer.

“We are concerned our rate will also be going up in the months ahead,” she said. “We are seeing the impact of the national economic trends here in Maine.”

But the numbers used by the Labor Department do not tell the whole story of Maine’s unemployed, Ed Gorham, president of the Maine AFL-CIO said Tuesday. He said the “official” numbers count only those in the system who are looking for work and have met state eligibility requirements.

“No doubt in my mind that these numbers are low,” he said. “Not everyone that works is counted by the unemployment system and there are many workers that are discouraged and have run out of benefits and can’t find a job.”

For example, Gorham said, seasonal workers are not covered by unemployment insurance so they are not “on the radar screen” and counted as out of work and looking for work. He acknowledged the expansion of unemployment insurance to cover part-time workers had improved the situation for some workers, but argued the current system is not counting thousands of Mainers without a job.

Fortman said Maine computes its numbers the same as other states. To be counted, a person has to be out of work and looking for work.

“I do agree that if a person is out of work and stopped looking for work they are not part of the [unemployment rate] number,” she said.

Fortman said there is not a reliable estimate of how many “discouraged” workers are in the state, but agreed with Gorham that there certainly are workers who have become discouraged.

“We urge them to go to our career centers.” she said, “They can get help there in finding a job even if they have exhausted their benefits.”

Gorham said lawmakers should act next session to cover all workers in the state.

“Everybody should be covered,” he said. “That’s what unemployment insurance was set up to do and in many other jurisdictions, more workers are covered than there are here.”

But any expansion of eligibility is likely to provoke a major legislative battle. Peter Gore, a lobbyist for the Maine Chamber of Commerce, said last month that employers are very concerned about efforts to increase or expand unemployment benefits.

“Just because the trust fund is in good shape now does not mean we should be adding programs to it,” he said.

The state fund has 18 months of reserves. That’s about $460 million and is funded by a tax on employers. By the end of 2008, Maine employers will have paid an estimated $89.5 million into the fund. Unlike some states, Maine’s unemployment insurance fund is paid for entirely by employers.

For the week ending Oct. 18, 7,200 workers received regular unemployment insurance benefits averaging about $264 a week. An additional 2,112 workers received federal extended benefits averaging about $248 a week. At the same time, the Department of Labor estimated there were 39,800 Mainers out of work and seeking a job.

The official unemployment rate in September was 5.6 percent, up from 4.9 percent in September 2007. During that same period, Maine lost 2,400 jobs even as the number of Mainers in the work force grew, said Labor Department economist Dana Evans.

“In general, there is a slightly higher percentage number of the population in the labor force than a year ago,” he said. “Couple that with the fact that the population has been growing slowly.”

Maine had a net increase in jobs until the summer, losing a net 1,000 jobs from August to September alone.

The official unemployment rate ranges from 4 percent in Cumberland County to 8.5 percent in Piscataquis County. Evans said the numbers are considerably better than those earlier this decade at the height of the recession.

“This isn’t even close,” he said.

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