Is any work better than no work? Not for unemployment benefits.
Unemployed Americans who take parttime or temp work may find that their unemployment benefits get cut after that job ends. It's a disincentive to work, but Congress is moving to remedy that.
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Hanson’s situation is even worse. Connecticut's formula for parttime workers is to take two-thirds of their gross salary (in her case $130 a week, which is $87) and subtract that amount from $39, which would be her weekly benefit based on the parttime job. This gives her a negative $48, or no benefit at all.Skip to next paragraph
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“Something is wrong,” Hanson says. “I am allowed to get nothing!”
Temp jobs on the rise
The potential reduction in benefits for parttimers and temps comes as temp services are starting to hire more workers because businesses don’t want to add fulltimers until they're sure the economic recovery is permanent. In February, temporary help services added 48,000 jobs, the US Bureau of Labor Statistics reported. Since September, jobs at temp services have risen by 284,000.
In the 1990s, the last time America saw high long-term unemployment among a sizable share of its work force, Congress changed the law to prevent the unemployed from being penalized for taking up parttime work. However, that change expired.
Now, Sen. Jack Reed (D) of Rhode Island is sponsoring legislation to accomplish the same thing today. Senator Reed attached his proposal to a bill that extended several tax provisions, plus farm disaster assistance, unemployment benefits, and COBRA health benefits.
“We need to incentivize people to find work, not unfairly punish folks who were able to find short-term, temporary employment,” said Reed in a statement.
However, the legislative package, which passed the Senate on March 10, is in limbo because the House version is different.
Reed argues that his change could potentially help states, because the long-term unemployed would receive benefits from the US Treasury. Many state unemployment funds are now insolvent and have had to borrow from the US government.
It could also help people like Hanson, who worked for 28 years for a Connecticut social services program that was eliminated. She is trying to support her elderly father as well as herself on her parttime job, credit cards, and Social Security. “I have written everyone from President Obama – from whom I [have] heard nothing back – to my local representative [in Congress], Rep. Rosa DeLauro (D), who is very supportive,” she says.