While Connecticut’s unemployment rate ticked up to 8.5 percent last week, it’s gradual recovery from highs near 10 percent has been good news both for those who found jobs and for the state’s economy. But for some individuals who have handled jobless claims for the state, it’s meant a trip to the unemployment line.
As Connecticut’s jobless rate has shrunk, so too has federal funding for staffing levels at the state Department of Labor. Today, the agency has 89 people who handle jobless claims from unemployed residents, but that number is down nearly 20 percent from a year earlier, said DOL spokeswoman Nancy Steffens.
When unemployment claims were at the highest point during the recession, the state DOL was handling about 180,000 claims a week. The overwhelming case load forced the hiring of 40 temporary workers to assist with the work. That hiring was financed in part by federal grants, Steffens said.
The state’s unemployment rate reached its peak in 2010 at 9.4 percent. Since then, however, the state’s jobless rate has unevenly fallen to 8.5 percent and the claim load has shrunk to 95,000 to 100,000 a week.
As result, the labor department has cut 24 positions in its claims handling unit, Steffens said.
Some of those employees were promoted to fill permanent vacancies within the DOL, but the rest were either laid off or left voluntarily.
Connecticut is not the only state laying off or reassigning workers who staffed unemployment benefits call centers and processed claims. With the economy recovering, about half the nation’s states are dealing with reduced federal funding, forcing them to make staffing changes.
In Michigan, where the unemployment rate has gone from a high of 14.2 percent to its current 9 percent level, about 400 state workers who process unemployment claims are losing their jobs.
Also, President Obama’s 2009 stimulus act doled out even more money to help cover states’ increased unemployment benefits caseloads. But those funds have pretty much dried up.
So even states where the jobless rates are still high are forced to make changes.
In California, which has the nation’s third-highest unemployment rate at 10.7 percent, the state has shifted unemployment workers to disability insurance and tax processing after losing federal support.
Rhode Island, meanwhile, laid off 65 workers, most of them on temporary assignment, after running out of stimulus funds. This comes even as the state still battles a 10.9 percent unemployment rate, the second-highest in the nation.
Steffens, of the CT DOL, said the declining claims volume is largely due to the fact that federal Emergency Unemployment Compensation (EUC) and Extended Benefits (EB) are no longer available to many claimants.
In 2009, when the recession was causing high job losses, the number of state benefit claims averaged about 100,000 a week. Federal claims at that time totaled approximately 55,000 weekly and continued to climb as jobs were hard to find.
In comparison, the state today is only handling about 65,000 state claims and 30,000 federal claims.
During good economic periods, Steffens said, the typical number of state claims is closer to 35,000 to 40,000 with no federal benefit programs in place.
Meanwhile, federal funding for the various unemployment insurance programs being offered by the state has slowly eroded over the last few years going from $70.1 million in 2011, to $64.9 million in 2012.
Next year federal funding is expected to drop to $59.5 million. Steffens said the agency has been carefully monitoring staffing levels so they can avoid any large scale layoffs like in Michigan or Rhode Island.
Connecticut’s economic recovery has been a slow one. The state’s recession, which officially ran from March 2008 to February 2010, caused the state to lose 117,000 jobs. Only 35,000 jobs have been recovered so far and the state’s unemployment rate has actually ticked up recently as more people get off the sidelines and begin to look for work again.
CNN reporting contributed to this story.
