Unemployment Benefits

From the looks of it, the US economy is poised for a comeback. The Obama administration’s $787 billion stimulus package which is designed to provide money for public works, extend unemployment benefits and help the ailing mortgage industry is having a positive effect.

The package plus the multitude of government moves such as slashing the key bank lending rate to an all-time low and the approval of programs to inject billions of dollars into the financial and banking system is delivering encouraging results to a recession which has its roots in the mortgage industry. The stocks are rising, the housing industry is on the rebound and the general consumer index is bouncing up.

Everything seems to be on the upward trend, even the Federal Reserve chairman, Ben Bernanke described the recent developments as a "gradual resumption of sustainable economic growth", except for one big factor which that up to this point just refuses to join the party.

The US unemployment rate zoomed to a high of 8.5 percent in March as employers axed 663,000 more workers and pushed the nation's jobless ranks past the 13 million mark. The hard times for the unemployed is expected to get harder as the jobless rate will top 10 percent by the end of the year. Big companies continue to slash jobs, recently 3M Company is kicking 1,200 staffs off its door and Caterpillar is getting rid of more than 1,000 people.

The good news is, in the US if you are unemployed; the government supports you by providing unemployment benefits. You are eligible for benefits if you are lost your job for good reasons. You are illegible if you were fired for misconduct, resigned because of illness, left in order to get married, self employed, involved in a labor dispute and attending school. If you qualified, you will receive compensation for a period of time.

This aid is meant to provide financial assistance while you are looking for work. Compensation varies from state to state. In New York, you may receive as high as $405 weekly, while in Arizona, the highest you can get weekly is $205. By the way, this benefit is taxable. To apply for unemployment aid you need your social security number, mailing address, phone number and the employment details of all your past employers for the last two years.

However, these benefits are threatened by the current practice used by companies. The name of the game is to get rid of as many workers as possible and see if its working out in improving the overall financial health of the company, if not then fire some more.

With hiring on the freeze, a lot of unemployed remains in this stage for so long, in fact the government fear that the jobless will exhaust their unemployment benefits. States normally provide 26 weeks of unemployment benefits. In 2008 Congress approved on a 20 extra weeks of benefits, and months later added another 13 weeks in states with high unemployment rates. That’s a total of 59 weeks of financial aid to temporarily tie up the jobless.

The current situation leads to the unemployed who have been in the program the longest time to lose their benefits. It is estimated that up to 700,000 people could exhaust their extended benefits by the second half of this year.

The Obama administration have to move quickly to turn the recent gains in the economy to something that will benefit the labor market, otherwise this gains will be short lived.