Pa. braces for economic impact as 1st big wave of jobless exhausts benefits checksBy Marc Levy, Associated Press Writer
Saturday July 18, 2009
SourceHARRISBURG, Pa. (AP) -- Thousands of jobless Pennsylvanians are joining the growing ranks of people around the country who are exhausting unemployment benefits, as some experts worry about another blow to a stumbling economy.
Gov. Ed Rendell said 17,800 Pennsylvanians exhausted their jobless benefits in the week that ended Saturday, the first big wave of Pennsylvanians to do so. He urged legislators to pass a bill to extend the benefits.
Around the country, the number of people exhausting their benefits is piling up. By the end of September, more than 500,000 people will exhaust their benefits checks, with the biggest groups in Pennsylvania, California and Texas, according to estimates by the National Employment Law Project, an advocacy group for low-wage workers based in New York City.
That number will nearly triple by the end of the year, the group said.
Economist Mark Price, of the Harrisburg-based Keystone Research Center, which is affiliated with organized labor, said the loss of that spending money in such a large quantity is likely to force businesses to lay off employees, deepening the economic doldrums.
"As those people stop spending, it will mean businesses have less income and they'll start cutting back workers or hours," Price said. "We're still in a situation that it's not clear we've hit bottom, and this is going to push us further down."
As part of the federal stimulus law, states can offer an extra 20 weeks in federally funded benefits. Most states have accepted the offer, although the extended benefit is triggered when a state's unemployment rate reaches certain benchmarks and not all states have met the criteria to offer it.
Many unemployed Pennsylvanians currently are eligible for up to 72 weeks of benefits, including 13 from the stimulus law. The state unemployment rate just reached the three-month average of 8 percent, qualifying residents for another seven weeks once legislation pending in the state Senate is approved.
Rendell, a Democrat, accused the chamber's Republican majority of using disingenuous reasons for keeping the bill bottled up and urged senators to pass the bill by the end of Monday to avoid interrupting benefits.
"We shouldn't hold 17,000 workers and 17,000 families hostage," he said.
The bill overwhelmingly passed the Democratic-controlled House on July 7, with just one "no" vote. The Senate's majority Republicans, however, have not said whether they support the extension because of the cost to the state and local governments.
Under the extension, the federal government picks up the cost of the benefits for people laid off by private-sector employers. State and local governments foot the bill for their own ex-employees.
Senate Labor & Industry Committee Chairman John Gordner, R-Columbia, said he's seeking responses from the Rendell administration, Philadelphia, Allegheny County and representatives of local governments to determine how much support exists for the bill.
"We don't want to pass legislation and then hear complaints from these entities that we are mandating another cost on them," Gordner said.
Rendell supports it, as does Allegheny County Executive Dan Onorato.
Philadelphia Mayor Michael Nutter, who is grappling with a severe cash shortage, said passage of the bill will cost the state's largest city $375,000. But, he does not oppose it because the federal extension will mean $31 million in benefits to more than 10,000 people in the city, he wrote in a letter to senators.