AUGUSTA, Maine — The first few hundred Mainers start to exhaust federal extended unemployment benefits this week and the number will grow rapidly in the next few weeks. But if Maine’s unemployment rate continues to increase, they may once again qualify for benefits.
“The extension passed in October starts to run out this month,” said Labor Commissioner Laura Fortman. “Those are the people we are talking about starting to exhaust their benefits unless Congress passes another extension or Maine’s unemployment rate continues to go up.”
Fortman said another 13 weeks of benefits are available under existing legislation to states that have had an average unemployment rate over 6 percent for the last three months. Maine could hit that trigger when the rate for December is computed later this month and averaged with the previous two months.
Fortman said 100 to 200 Mainers are losing benefits this week, but that increases to 600 to 700 next week and an additional 900 to 1,000 workers the following week.
Mainers exhausting their 26 weeks of regular state unemployment benefits are eligible for the federal extended benefits. Extended benefits were approved twice in 2008 by Congress for up to 13 weeks.
“I am not so sure there is a realization that people will start losing their extended benefits,” said Sen. Olympia Snowe, R-Maine. “We have to move to extend benefits even before the stimulus package, even if it has to be a standalone bill.”
Snowe said the national unemployment numbers are “horrendous,” and she fears Maine’s rate also will continue to climb. The national rate for December was 7.3 percent, the highest in 16 years. Maine’s December rate has not been released.
“It is important that we act now to extend those benefits as we see the skyrocketing unemployment rates,” said Sen. Susan Collins, R-Maine. She said that while there have been discussions about including an extension in the stimulus package, she hopes the Democratic leadership in Congress will move to pass an extension this month.
“We are hurting, not only in Maine, but nationwide,” said 2nd District Rep. Mike Michaud, D-Maine. “It’s not as if a lot of people are not trying to find a job; it’s that the jobs are just not there.”
He is confident the House will pass an extension, but is concerned it will languish in the Senate. He said Senate rules could slow down consideration of an extension until Barack Obama takes office as president and predicted if that happened, the new president would immediately push for an immediate extension of benefits.
“Everyone has extended benefits as part of the stimulus package,” said 1st District Rep. Chellie Pingree, D-Maine. “The question is when they will be passed. I think the sooner the better.”
She said a lot of discussions have been under way about the stimulus package, and she believes if the extension is not passed separately, it will be part of the package.
“I don’t think anyone thinks we will get out of this recession soon, and we will need extended benefits to help those that have lost their jobs,” Pingree said.
Fortman agreed federal extended benefits will be needed well beyond the current extension program. She hopes Congress acts swiftly on an extension.
“This program is so important to helping those out of work and looking for work,” she said. “This is truly part of the safety net people talk about.”
For the latest week that data are available from last month, more than 22,000 Mainers received unemployment benefits. Over 17,000 received regular unemployment insurance benefits averaging about $265 a week, and about 5,300 were receiving federal extended benefits averaging about $252 a week. In addition, recipients get an extra $10 a week for each dependent.
That totals about $6 million a week that economists believe goes directly into the economy to pay for the necessities of life such as food and heat.
Maine’s unemployment fund, unlike many states, is in good shape to handle the increased demand of more unemployed. The state fund has 18 months of reserves — about $460 million — and is funded by a tax on employers. In 2008, Maine employers paid an estimated $89.5 million into the fund. Unlike some states, Maine’s UI fund is paid for entirely by employers.