Mich loses federal extended benefits

GRAND RAPIDS, Mich. (WOOD) - Michigan will stop receiving federal extended unemployment benefits later this month, 24 Hour News 8 learned.

Sources said the change will impact between 20,000 - 30,000 people who are receiving extended benefits from the federal government.

Extended Benefits will be stopped for the state of Michigan based on the most recent Bureau of Labor Statistics (BLS) the state. No one will receive the final 20 weeks of employment aid after the week ending on February 18.

Federally-funded extended benefits kick in for states experiencing the greatest economic distress, part of which is based on the unemployment rate. Michigan's unemployment rate is currently at 9.9 percent.

It's a high number, no doubt, but lower than the past few years.

In 2008, the rate was at 10 percent, in 2009 the rate was at 13.9 percent and in 2010 the rate was at 11.4 percent.

In order to qualify for those last 20 weeks, the current unemployment rate needs to be 10 percent higher than in any of the three previous years. In order to get that number, the BLS divides the current unemployment rate by one of the past year's rate.

So for example, if you took the 9.9 percent rate and divided it by the 2009 rate, the number would have to be one hundred ten or higher. That would indicate a ten percent increase.

Unemployment benefits do not define the statewide unemployment rate, state officials have told 24 Hour News 8 . The rate is based on interviews with what officials calculate to be a representative sample of residents. But if a person who exhausts benefits stops looking for work, he or she does disappear from the ranks of the unemployed.

For the week ending Jan. 24, 2012, initial unemployment claims in Michigan dropped by 6,812. That’s the f ourth biggest decrease in the nation.

For those who are getting unemployment payments right now, they fear any elimination of benefits.

"The benefits right now is like a live or die," said veteran Dennis McBride. McBride was laid off from a furniture manufacturing company. "If I don't have them, then I'm almost like dying... and with the benefits I can live."

So when McBride was asked what he would do if he loses his benefits he said, "It's like dying, it's real hard out here now.  The main thing is to keep hope...keep hope, and keep doing what I need to do which is searching, and keep putting in applications...and just keep seeking."

In the most impressive surge for the job market since early last year, the United States added 243,000 job s in January , far more than economists expected. The unemployment rate dropped to 8.3%, the lowest in three years.

Hiring accelerated across the economy and up and down the pay scale. The high-salary professional services industry added 70,000 jobs, the most in 10 months. Manufacturing added 50,000, the most in a year.

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According to the US Department of Labor , there are several levels of unemployment:
 
1) State Benefits:  26 weeks (20 weeks if unemployed after January 15, 2012)
2) Federal Emergency Unemployment Compensation Tier 1: 20 weeks
3) Federal Emergency Unemployment Compensation Tier 2: 14 weeks
 
4) Federal Emergency Unemployment Compensation Tier 3: 13 weeks- to qualify you need:
-13 week unemployment rate of 4.0% or higher
- 3 month seasonally adjusted unemployment rate of at least 6.0%
 
5) Federal Emergency Unemployment Compensation Tier 4: 6 weeks- to qualify you need:
- 13 week unemployment rate of 6.0% or higher
- 3 month seasonally adjusted unemployment rate at least of 8.5%
 
6) Federal Extended Benefits: 20 weeks (This is what is going away)

The Associated Press contributed to this report.