Friday, May 11, 2012

California Unemployment Drop in March, the Lowest Cut Down in 2 Years

The State of California had more than 2 million jobless people in March.

However, the number of unemployment claims received by the State has dropped by 17% compared to March of last year, said the Employment Development Department.

Last March, the State handled some 509,235 unemployment claims compared to the 616,884 claims filed in March of last year. The March figures also show a major cut down since two years ago when the month of March claims reach a staggering 718,396 claims.

The number of people filing for unemployment claim is meaningfully lower than the total jobless since thousands of self employed and others are not qualified for the benefits.

Factors eyed as a major reason behind the cutoff in claims is the approximately 242,000 fewer Californians jobless in March. This is compared to the figures recorded during the peak of economic recession way back in September, 2010 when some 2,272,900 residents were officially declared unemployed. 

Some experts believed that the following factors contributed a lot to the drop in claims in the Golden State:

•    March, 2012 has approximately 242,000 fewer jobless people than during the peak of economic recession way back in September 2012 when 2,272,900 unemployed residents were officially declared.

•    More unemployed Californians have drained their 99 weeks of jobless benefit. EDD figures as of May 1 reveal that some 673,000 people had turned into unemployment rolls after maxing out their unemployment benefits. It is not even clear how many of them recently found a job.

This current month, the number of claims is expected to drop significantly. Approximately 90,000 residents will be out of unemployment lists after May 12, since the State is no longer accepting applications for the so-called Fed-Ed federal emergency aid.

It means that the 99 weeks of unemployment benefits will be reduced to a maximum of 79 weeks of aid. Furthermore, said benefits will again be reduced to 73 weeks in September in line with the unemployment extension phase-out approved by the Congress. By December, all federal unemployment benefits will eventually end, leaving the upcoming unemployed with a maximum of just 26 weeks of State aid.

Due to the unemployment drop, the State’s payouts for unemployment benefits likewise dropped. In an average, California pays $107 million in a day in March 2010, while in March this year, the State only pays $59 million daily, a decrease almost double from the previous amount.

However, the drop in payouts had done nothing to help California’s Unemployment Insurance Trust Fund to get out from being dipped in hot water. The State had been in fact, borrowing from the federal government to pay the unemployment benefits because the unemployment tax revenues do not meet the required amount for the payouts since January of 2009. As of March this year, California owed a total of $10.8 billion from the U.S. government for the money the State has borrowed to pay unemployment benefits.

Nevertheless, it is still a great achievement for the State of California since it is apparently doing well in attempting to reduce the federal government’s burden when it comes to unemployment claims. A Los Angeles employment lawyer is quite impressed with the State’s giant step in moving forward.