hide captionEven though she doesn't have any clients right now, Barbara Ratner continues to draw to keep busy.
Even though she doesn't have any clients right now, Barbara Ratner continues to draw to keep busy.
Almost two-thirds of those who are out of work do not qualify for unemployment benefits. The law that created unemployment insurance was passed in response to the Great Depression of the 1930s.
But since then, much has changed in the labor force, including the large numbers of self-employed who are left out of the system.
Most people believe if they're laid off — downsized or simply out of a job — they will get unemployment insurance benefits. While each state has different guidelines on the amount paid and the length of time people can receive benefits, the federal system, created in 1935, simply does not cover the majority of today's workers.
"The largest group of people that do not qualify for unemployment insurance are the nontraditional employees," says Howard Rosen, a labor market expert with the Peterson Institute for International Economics. He says millions who are not full-time, permanent employees are out of luck.
A growing number of people who are consultants, self-employed, temporary employees, part-time employees — a whole plethora of different kinds of arrangements — are not currently eligible for assistance, Rosen says.
Among this group are Barbara and Gary Ratner. Gary Ratner completed a doctorate in biochemistry from Emory University. Barbara Ratner has been a self-employed architectural illustrator since 1990, when she was laid off from a company in Atlanta.
"And I actually never had to worry about work," Barbara Ratner says. "The phone just kept ringing. It was — it was like magic."
She had so much work when she was laid off, she didn't apply for unemployment benefits. Now, because she's self-employed, she doesn't qualify for them.
She says business began slowing down last spring and by December, she had finished her last job.
"I'm beginning to identify with the frog in the pan of water where someone turned the heat up and it took me a while to realize that yes, this isn't like it has been before — and I don't know where it's going," she says.
Dipping Into Retirement, Cutting Costs
At the cozy dining table in the home where they have lived for more than 20 years, Barbara Ratner showed off her office and handmade drawings.
She has created architectural drawings for some big projects, including Atlanta's Olympics, a financial center in Taiwan, retail shops in China — even the Los Angeles and Portland zoos. And she usually makes between $80,000 and $100,000 a year. But now that new construction has slowed dramatically, there's no demand for her drawings.
The Ratners have already pulled nearly $10,000 from their retirement account. They are cutting back where they can — eliminating a phone line and canceling memberships to civic groups. Gary Ratner decided to retire late last year. And because they're in their 60s and do not have a group health plan, the couple pays $1,500 a month for health insurance.
"I've actually been considering getting rid of medical insurance," Barbara Ratner says. "It's huge. And so if we wanted to gamble, we could just drop the health insurance."
The couple is using their retirement savings, and that worries them. They're looking for creative ways to get by. Barbara Ratner says she's seriously considering raising chickens in her backyard, like her parents did way back when.
"They lived through the Depression and my father always felt like his family basically did better than other families because they had a chicken coop and they had a big garden," she says. "And they lasted it out."
Gary Ratner is hoping to get a biochemistry fellowship, while his wife continues to look for work. And both hope that President-elect Barack Obama's economic plan will create new jobs and ultimately turn the economy around.
Checking On Unemployment Benefits And Eligibility
by Erin Killian
When unemployment reached a 16-year high in December, it left millions of people scrambling to make ends meet. So what can you expect from the government if you're laid off? Here are some things to consider:
How many unemployed workers are there?
About 10 million, and half of them are in eight states including California, Florida, Michigan and New York. Of the 10 million, only about 4 million are getting unemployment benefits. And 1.5 million of those recipients exhaust the money before they get another job, according to Howard Rosen, a visiting fellow at the Peterson Institute for International Economics in Washington, D.C.
How much can you expect to get in unemployment?
The average national weekly amount is $296.17, Rosen says. Rates vary by state: Some pay a standard across-the-board rate, while others prorate payment depending on income. For example, Illinois' jobless benefits range from $51 a week for individuals to $511 for workers with dependent children.
But first you have to qualify.
What does it take to qualify?
There are four criteria, and many people who have been laid off don't meet all of them. First, your employer must have paid into the unemployment fund on your behalf (99 percent of employers do); this doesn't usually cover temporary or part-time employees. You had to have worked for your employer for a substantial period, usually at least one or two years, depending on the state. You cannot have been let go for cause or, with some exceptions, have left voluntarily. And you had to have worked each week for at least 35 hours and $35, according to the antiquated law written in 1935.
How long do benefits last?
The standard length is 26 weeks, or about six months. Last June, Congress extended benefits for an additional 13 weeks, and in November it gave seven more weeks of support to workers who had gotten the 13-week extension. The November legislation also allows up to 26 extra weeks of unemployment benefits — for a total of 52 weeks — for workers in states with a jobless rate higher than 6 percent. These extensions are not permanent.
What could keep you from getting the money?
If you have any other kind of weekly income — including severance pay — it is subtracted from your unemployment check. If an employer offers severance pay, it may be more beneficial to take it in a lump sum rather than in installments, so you can get unemployment benefits. Also, if you own a home and rent it out, that rental income would be taken into consideration when calculating your unemployment benefit. Alimony is exempted.
Are states running out of unemployment money — and if so, does that mean there won't be money for me?
Thirty states face serious issues as their unemployment trust funds dry up, though they can borrow from the federal government to ensure benefits for the average worker.
If you don't qualify for unemployment, what other resources are available?
There are other programs designed to help low-income people. Programs such as food stamps can help if your income is low enough. For example, an individual's net monthly income has to be $867 or less. But for a household of five, the threshold is $2,067. Workers with dependent children may qualify for Temporary Assistance for Needy Families. Also, some states may have other types of low-income assistance.