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Calif. paying $80 million a day in jobless benefits

July 10th, 2009, 7:51 am · 25 Comments · posted by Mary Ann Milbourn

California is now paying out about $80 million a day in unemployment insurance benefits and is on a pace to top $1.5 billion for the month of July, Employment Development Department officials report.

unemploymentapmedThat latest numbers show the severity of the current recession that pushed statewide unemployment to a record 11.5% in May. Unemployment in Orange County had a modern-day record of 8.6% in May.

Unemployment benefits payments have jumped $500 million a month since January when the state paid out $1.1 billion in the wake of a 525,000 surge in new claims.  In all of 2008, the state sent out $8.2 billion in unemployment checks.

Loree Levy, an EDD spokeswoman, says first-time jobless claims usually drop off in the summer but this year they are rising. The state paid out $398.2 million in benefits the week ending July 4 and $410.8 million the prior week. (The July 4 week may have been a little lower due to the holiday.)

Unemployment payouts are up nearly 200% in the first six months of 2009 to $9.3 billion this year compared to $3.3 billion in the first half of 2008. A large part of that increase is due to extensions in benefits approved by Congress beginning last summer that weren't available in the first half of 2008. Many jobless workers in California are now eligible for up to 79 weeks of unemployment benefits. In addition, Congress approved a $25 increase in weekly benefits in February.

California's Unemployment Insurance Trust Fund ran out of money in January. The state has been borrowing from the federal government since then to make the payments.

Last year, state officials projected the trust fund would be $15.2 billion in the red by the end of next year. In May, they revised that number to $17.8 billion. Just two years ago, the fund had a $2.7 billion surplus.

The unemployment insurance trust fund is supported through taxes paid by employers. The governor has called for changes which could include an increase in the employer contributions, tighter eligibility requirements and a decrease in weekly benefits paid.

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 25 Comments

  • ocobserver says:
    July 10, 2009 at 8:15 am

    The only real solution here is a complete meltdown. Anything short of that will only result in bandaid approaches that will fail down the road. Let's get it over with. Let the State go bankrupt.

  • Mike Bridge says:
    July 10, 2009 at 8:15 am

    You must know that if any other entity other than the government were to manage these benefits (by paying out substantially more than they take in) would be called a pyramid scheme and would be criminal. Medicare, Social Security, Unemployment, etc. are basically insolvent, bankrupt and administered by bureaucrats and politicians who will never admit this depressing news. More importantly they would rather ignore the problem, pass it on to future legislatures and keep pointing the fingers at the other political party.

  • waiting says:
    July 10, 2009 at 8:18 am

    For decades the state has taken money from employers for unemployment benefits with relatively low unemployment. So now comes the time when it is time to start paying back they have run out of money in just a few months? What happened to all the money you have taken in over all these past decades?

    I know some of it has been payed out every year but I have never collected and I don't know anyone who has. This state is run by morons and we only have our selves to blame. We keep voting for these people. Don't vote for any incumbents ever again. Let's replace them all.

  • Reality says:
    July 10, 2009 at 8:45 am

    Eventually the unemployment checks & welfare will stop arriving & crime rates will skyrocket. Then eventually riots will erupt for basic needs such as food & water the national guard will be called in to help protect the "clean people" that's the wealthy folks. And as time passes not even their money & huge gates & guards will protect them as the entire U.S. falls into decay & riots on a level we have never seen or imagined. By 2011 the U.S. will be a completely different country & many will be asking Canada for asylum from the U.S. G0D I hope I'm wrong...

    California...
    http://img3.yfrog.com/i/image5122257.jpg/

    • never ending fight for freedom says:
      July 10, 2009 at 11:02 am

      Quick, everyone, tin foil hats!!!!!!!!!!!
      If they cant read our minds we wont end up on the matrix.

  • never ending fight for freedom says:
    July 10, 2009 at 8:58 am

    & how much of this is paid to NON CITIZENS?
    LOT$ I can guarantee you that!

    & o.c. observer, complete melt down is what IS happening.
    Just like watching a train wreck, huh.

    toot toot

  • tenyrslater says:
    July 10, 2009 at 9:02 am

    Sadly, I know of 2 people, right now, who are on unemployment, and they are basking in the sun. They don't care to look for a job, they are just laying around and smoking funny things. I keep telling them it will run out, and then what? They just laugh at me.

    When I was on it, I looked everyday, in fact it wore me out.
    Looking for a job is much, much harder work than working at a hard job. And eventually I found one.

    I hope CA gets back on it's feet and everyone will be OK.
    Sorry, but it's so hard for me to believe that CA is in such termoil, considering how many rich people live here and how many people come here to vacation. Possibly we are handing out too much, like food stamps, welfare, etc to people who should not be getting it?

    Or maybe we need to change our Government Employees, across the board?

  • mark says:
    July 10, 2009 at 9:09 am

    Can someone explain this? I thought unemployed people filed an unemployment claim and their previous employer paid for their benefits. A recent article pointed out that many of these claims are being challenged or denied by employers. So if businesses are paying unemployment for past employees, what and or who is the State paying for?

    • tenyrslater says:
      July 16, 2009 at 12:51 pm

      Mark, YES only the Employers pay into this fund.
      It depends on how you lost your job.
      If you were fired because of being late, using drugs, etc, you will most likely not get the benefits. Once an Employee files for Un-employment, EDD sends a notice to the Employer. They have 20 days (I think) to fill out that notice and give their side of the story if they wish not to let their employee receive benefits. If the Employer does nothing to stop the benefits, then the employee will get them.

      I had an OLD and mean employer terminate me (long story why, and I was glad to leave). He told me it will be OK for me to file for unemployment.
      Then 4 MONTHS later he changed his mind.
      He notified EDD, then I received a letter stating my benefits will stop.
      I appealed it and won.

      I personally think the way this benefit is handled is all wrong.
      I think the employee should pay into this fund and not the employer, why?
      Because if anything should happen to your job, then you should be entitled to get it no matter what the reason is for losing it. You worked hard and paid into it. Some people, like me, REALLY NEED this benefit once you loose your job.
      You need to pay the rent and have a place to live plus gas and insurance to go look for a job. If you don't have any savings or other means to support yourself, and not get this benefit, then you will be homeless.
      I hope I answered your question, a little late, but I hope it helps.
      :)

  • Irwin Orwin Urwin says:
    July 10, 2009 at 9:12 am

    So are they paying unemployement benefits with IOUs as well, or do they just reserve that for people who pay taxes?

  • Mitchell Schliebs says:
    July 10, 2009 at 9:41 am

    California doesn't have $80 million a day to pay out. The state borrows the money from the Fed and must repay it with interest. I believe that the loan term is about 2 years. This is just another bit of evidence as to what's wrong with the way this state is managed.

  • blah says:
    July 10, 2009 at 9:52 am

    What I found funny was that the EDD recently had to hire more people so they could keep up with the unemployment activity. Haha. Ironic?

    • Blue-On-Black says:
      July 10, 2009 at 11:07 am

      Hopefully some of those hire-ees are intended to investigate fraud. I submitted a report last month - someone getting nearly $2k a month and working under the table contracting. Its not just the legislators and the illegals bankrupting the state but also the people who believe since they worked hard to pay into the system that their actions are justified.

  • flipstyle23 says:
    July 10, 2009 at 9:58 am

    Unemployment benefits are paid solely by the employers. Employers are only taxed on the first $7,000 of an employee's wages. We owe this mess to our great governor prior to Arnold, the great Gray Davis. Gray Davis increased the maximum weekly benefits yearly from $230 to $330 then to $370 and now to the current level of $450. But at the time that he signed the law he was told that there wasn't sufficient money in the fund if there was any type of downfall in the economy. He did not care to try to solve that problem.

    Unemployment benefits are not being paid with IOUs it is against federal law to do so.

    Signed,
    A unemployment rep using one of his furlough days

  • mark says:
    July 10, 2009 at 10:07 am

    The State Department confirmed today that as many as 1,350 Iraqi Palestinians – once the well-treated guests of Saddam Hussein and now at outs with much of Iraqi society – will be resettled in the US, mostly in southern California, starting this fall. (but hey, the Federal Gov't will give them plenty of money to live in Oceanfront homes)
    http://www.csmonitor.com/2009/0708/p02s04-usgn.html

  • Spence says:
    July 10, 2009 at 10:14 am

    Well, this is what happens when the State is unfriendly to business. There are fewer jobs. And there are still lots of people here that need to work. But since the State is so poorly run, they just keep shoveling money as if they printed it themselves.

  • StivBators says:
    July 10, 2009 at 10:37 am

    So where's this famous "private sector" and what's their big plan to help the unemployed? Oh, thats right they ware waiting for wages and benefits to fall to 1918 levels.

  • gdb says:
    July 10, 2009 at 10:41 am

    unemployment insurance is just subsidizing the unproductive and it's a huge drag on business. it's socialist. safety net... only libruhls believe in that. if conservatives had their way, there would be no safety net, and we'd all be a lot more careful and a lot better off. and we don't need any of this clean air regulation either. bah. this nation used to be a free market capitalist country back in 1900, and if you keep supporting the GOP, we can return this economy to the glory years of the 1900s--back when the super wealthy got super wealthier and everybody else got jack. a wonderful time that is true to the conservative vision for america!

    • StivBators says:
      July 10, 2009 at 11:02 am

      Yes the free market is helping SOOOO much. Capitalism has failed...END OF STORY. Now what?

      • StivBators says:
        July 10, 2009 at 11:12 am

        By the way capitalism failed because it depends on people buying more and more "stuff" as the late George Carlin called it. Guess what...thie jig is up! People wont and cant buy more "stuff" so therefore capitalism as we knew it is dead. Why are car dealers failing? Because you cannot lease a Navigator or Suburban with a job at McDonald's and pulse. More business will fail because people have learned that they don't need that kind of "stuff" anymore.

  • JJ says:
    July 10, 2009 at 10:54 am

    Deport them!

    80 million bucks a day for these legal unemployed workers.

    I say lower the grant. Have them at least spend 15 hours a week doing something for their keep. That is pick up trash on the freeway, assist a nonprofit, or help out at any other govt agency. This keeps them from become a dependent sole, cuts out fraud(getting pad under table) and give the people rowing the boat a feeling that these guys and gals are being a little productive.

  • never ending fight for freedom says:
    July 10, 2009 at 11:05 am

    We are soooo screwed.

  • joe says:
    July 11, 2009 at 5:23 am

    Our system has many many problems, but the one being forced by o man will be much much worse.

  • brianguy says:
    July 13, 2009 at 2:27 pm

    the welfare state rolls on!