A tax cut or rent? For unemployed it's a no-brainer

Rose Hutchinson, another New Yorker, was getting final approval for a mortgage when she was laid off from her job as a sales coordinator at Circle Line Tours. Now, she and her two-year-old son are living with her mother, trying to get by on her last few weeks of UI.

The unemployed include low-end service workers, top Wall Street executives, travel-industry workers hit hard by Sept. 11, and maybe a few more dot-commers and young professionals than in past recessions. But for all, options are limited once their UI is exhausted.

Public assistance may be available to the neediest, but not for anyone with even slim resources, and, in many states, not unless they have dependents. The fortunate can live off their savings. Most people have to turn to their families, rack up huge credit-card debt, or sell assets, such as cars, says Rick McHugh, a staff attorney at the New York-based National Employment Law Project, a nonprofit advocacy group. "It quickly becomes very grim, because most people don't have a lot of weeks of salary set away. And if they've already been unemployed for 26 weeks, they've most likely used those up."

Unemployment insurance is an employer-funded program started in 1935. Eligibility and benefits vary by state, and depend on how long recipients have worked, how much they earned, and the reason they're out of a job. A worker who voluntarily quits isn't eligible; nor are independent contractors or the self-employed. Typically benefits are 50 percent of former wages, up to a certain maximum.

Theoretically, UI is an insurance mechanism to cover basic expenses until those who are unexpectedly out of work can find another job. But as the job market tightens during a recession, 26 weeks isn't enough for many, despite vigorous searches.

Suzie Brown, an experienced and well-connected product manager in Denver, figured she'd have no trouble landing another job after Qwest laid her off in October. She instantly started networking, and says she had internal contacts in about half of the companies where she looked for work. Still, after applying for 300 jobs, she can count on one hand the number of replies she received. "The three or four calls I've gotten in a period of four months said, 'I picked your résumé from over 800 we received in three days,' " she says with a discouraged laugh.

Others tell similar stories: Years of top experience count for little; hundreds of applications yield a few rejection notices.

Steve, a New Yorker who asked that his last name not be used, was laid off in June from his job as a computer-support specialist for an online publication. He found another job briefly in early September when he still felt he could be picky. The company didn't appeal to him, so he turned down the offer. He says he'd accept it in a minute now.

"The last time I looked for a job [in 2000] - from the time I started to look to the day I signed the contract took seven days," he says. "Now, [your résumé] goes out into the vacuum and you hear nothing," he says.

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