Act could increase assistance for Missourians

The Unemployment Insurance Trust went into debt in Feb. 2009.

By Christian Losciale

Published Oct. 27, 2009

For the second time in her life, Rita Alford is without a permanent job.

"I'm out every morning or on the computer, putting in applications," she said.

Alford, 50, injured her neck Feb. 28. At the time, she worked as a custodian for Columbia Public Schools and for a custodial company hired by private schools in Columbia.

By summer 2009, Alford used her sick and vacation days and turned to the state, but the Labor Department told her she did not qualify for unemployment insurance money during the summer. The justification stood if she still had her custodial position, she would not work for the public schools during summer vacation.

After a successful surgery on two discs in her neck in June, Alford was cleared to work just before the school year started. But Columbia Public Schools did not rehire her. With no source of income, Alford started using her savings, with which she planned to buy a condominium one day.

"I wasn't expecting this," she said.

Alford volunteered for the Salvation Army until she landed a job as the Christmas carol coordinator in October. The job is seasonal, which she said pays through mid-January.

Despite this part-time job, Alford still receives $76 a week from the Missouri Unemployment Insurance Trust. Before Oct. 1, she was receiving food stamps and $245 a week. But the state stopped giving her food stamps because those, combined with her UI money, exceeded the limit for her household by $8. Alford said she could use the UI money.

"It helps because I'm trying to play catch up on the bills," she said.

Alford isn't alone in budgeting, as thousands of Missourians remain unemployed. This week, the U.S. Senate will vote on the Unemployment Compensation Extension Act. Although it's likely to be heavily amended, the bill in its present form extends unemployment benefits by 14 weeks in all states and 20 weeks in states with unemployment rates higher than 8.5 percent. Missouri's unemployment rate is 9.5 percent.

This legislation comes as Missouri's UI fund continues to be insolvent. The unemployment fund, which serves as income to those who lost their job at no fault of their own, first went into debt in February and has been there since. This led the Missouri Department of Labor and Industrial Relations to borrow almost $246 million from the federal government to keep the fund afloat.

Money for the UI fund comes from employers who pay a tax to the state.

"There are more people taking money out of the fund then people putting money into the fund," Labor Department spokeswoman Amy Susán said. "You're constantly paying off a deficit and loan to the federal government."

MU economics professor Joe Haslag likened the fund to a bathtub.

"In this case, the drain was wide open," he said.

And Missouri couldn't stop the damage. The recession's length — 22 months according to the National Bureau of Economic Research — drained the UI fund.

"Missouri got caught off guard," Haslag said. "This recession seems to be lengthier."

The group that suggests what the weekly rate should be in Missouri is the state's Unemployment Council, a body of 11 members selected by state officers.

"We are purely advisory as far as our so-called powers are concerned," voting councilman Stephen Carter said. "We might make recommendations to the legislature and the division as to what we think are adequate payouts."

In March, the council opposed Missouri borrowing federal stimulus money for the UI fund. But the tax rates employers pay for the fund are determined by state statutes, not the council. Nine of the 11 members vote.

Every January, the council submits a report to those three officers, which summarizes the council's recommendations, Carter said. The council meets every month.

"The council's main role is to meet periodically to review any situation and make recommendations on improving the unemployment system," Carter said.

As for the UI insolvency, he said the council is talking with Missouri's Chamber of Commerce, Labor Department, Congress, Gov. Jay Nixon and the AFL-CIO.

"We don't know what to decide at this point," Carter said. "We don't think we're going to see the bottom of this recession until about the second quarter of 2010."

From August 2008 to August 2009, Boone County's unemployment rate increased to 6.7 percent from 4.7 percent, according to the U.S. Bureau of Labor Statistics. Mathews said in his region — Columbia and Jefferson City mostly — Salvation Army has seen a 15 to 20 percent increase in offering human services this year.

There are 157,000 people in Missouri claiming benefits, 11,000 who are claiming extended benefits, a longer period of unemployment insurance. Since January 2009, about 70,000 exhausted regular benefits and 4,200 exhausted Extended Benefits.

"They were on their last leg," Susán said about those 4,200.

Since June 2008, the federal and Missouri governments have passed legislation to increase extended benefits to UI claimants. A claimant could earn up to 79 weeks of UI benefits. Should the Unemployment Compensation Extension Act pass as is, Extended Benefits would increase to 99 weeks.

Other systems are set up to deter people from needing these benefits. In Columbia, Salvation Army gives unemployed persons a chance to volunteer. Maj. K. Kendall Mathews, the region's coordinator for Salvation Army, said he wants people to be independent of the organization's services.

"We don't want to give people a hand out," he said. "We want to give people a hand up. People are still unemployed in this community."

Alford volunteered at Salvation Army before getting a paying job there. Even when she volunteered for free, it fulfilled her.

"I'm a workaholic," she said. "When you work a lot, sitting at home drives you crazy."

A single mother of two sons, Alford was used to working several jobs to support her family. She used to tell herself that she wouldn't work two or three jobs once she turned 50, but that did not hold true.

Monday through Friday, Alford sends letters to volunteers and reviews their applications for Christmas caroling.

Although Alford has taken advantage of working for the charitable organization, she still owes about $2,300 of rent and less than $1,000 in medical expenses for her surgery. Her car payments are covered thanks to a friend who gave Alford money to make the last payments. Despite her debt and lack of job security, Alford remains in high spirits.

"If you don't have the right attitude, all you'll do is cry," she said. "And I don't wanna do that."