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On September 15, 2009, NASWA President Tom Whitaker (NC) testified before the Senate Committee on Finance on an extension of unemployment insurance benefits and approaches Congress can take to help states provide assistance to the unemployed. Click below for the written testimony and other materials.

Written Testimony with Graphs Oral Testimony Pictures

Video of Testimony Witness List Charts

President Whitaker noted that North Carolina, with an unemployment rate 11 percent, reflects the trend nationwide and summarized for the Committee the impact of the recession as it enters its 20th month:

• The economy has lost 6.9 million jobs since the beginning of the recession in December 2007.
  
  
• The number of unemployed persons reached 14.9 million in August compared to 7.7 million at the beginning of the recession.
  
  
• Over 9 million workers are receiving either state or federal unemployment benefits.

• President Whitaker outlined a series of obstacles states are facing as they try to process the historic workload of UI claims and help UI claimants get back to work. They include the following:
  
  
  • Job Creation: Overall, the national average ratio of job seekers to job openings is very high at 5 to 1, with 15 million unemployed workers seeking only about 3 million current job openings;
    
    
  • Unemployment: Economists predict the unemployment rate is projected to peak above 10 percent early in 2010 from the current rate of 9.7 percent;
    
    
  • UI Administrative Funding: The federal government does not provide enough funding for states to operate their unemployment insurance systems in a proper and efficient manner as required by the Social Security Act. The shortfall is more than $500 million dollars annually;
    
    
  • Antiquated Technology: Many states are processing unemployment insurance claims on outdated computer systems, some originally developed in the 1970s to handle a fraction of the states' current claim loads;
    
    
  • State Borrowing: Some 21 state UI programs have borrowed over $14 billion dollars from the federal government to cover UI benefits. The U.S. Department of Labor projects as many as 40 states will borrow approximately $90 billion dollars by the end of 2012.

• President Whitaker said the Recovery Act was a lifeline to the states and positive effects are beginning to show. But, Congress should examine approaches to help the unemployed until substantial growth puts them back to work. Here are some options he outlined:
  
  
  • Increase Funding for Reemployment Services which has proven to get workers back to work faster. Reducing the average duration of unemployment by one week would save about $3 billion dollars in the federal budget. While $250 million dollars was provided in the Recovery Act for these services, states will need additional funds.
    
    
  • Increase Funding for Reemployment and Eligibility Assessment grants to make sure UI claimants are searching for work through individualized consultations and assessments. Some 34 states have secured these grants from the U.S. Department of Labor, but more funding is needed to meet demand.
    
    
  • Enact changes to The Shared Work program with passage of Senator Reid's legislation, S. 1646, so employers have the ability to reduce hours, rather than lay off employees.
    
    
  • Correct Inequitable Treatment under the Extended Benefits Program so state and local governments do not have to reimburse their cost of extended benefits and will receive the same treatment as other employers.
    
    
  • Lessen the Administrative Burden of Extended Benefits Work Search Requirements by reforming the documentation requirement. Such a change would bring the EB claims filing process into harmony with other methods currently used by states.
    
    
  • Interest Free Loans: President Whitaker also thanked the Committee for helping insolvent states with the Recovery Act provision waiving interest on trust fund loans until January 2011, and asked for this provision to be extended until the end of 2012 in view of the 40 states projected to borrow at that time.
  TO VIEW ANY OF THE CHARTS CONTAINED IN PRESIDENT WHITAKER'S TESTIMONY, PLEASE CLICK ON THE LINKS BELOW
  
  Nonfarm payroll employment declined by 216,000 in August compared to 276,000 in July. The economy has shed 6.9 million jobs since the beginning of the recession in December 2007. (Click here for Chart Number 1)
  
  The unemployment rate was 9.7 percent in August compared to 9.4 percent in July and 4.8 percent at the beginning of the recession. (Click here for Chart Number 2)
  
  The number of unemployed persons hit 14.9 million in August compared to 7.7 million at the beginning of the recession. (Click here for Chart Number 3)
  
  Unemployed workers eligible for UI over the past year has more than tripled. (Click here for Chart Number 4)
  
  Nearly 10 million workers are receiving either state or federal unemployment compensation. About 3.5 million of these workers are receiving federal extensions of unemployment compensation authorized under the Recovery Act. (Click here for Chart Number 5)
  
  The number of workers unemployed for 27 weeks or more is 4.9 million; more than triple the number at the beginning of the recession. (Click here for Chart Number 6)
  
  The average duration of unemployment has increased to almost 25 weeks, which is the longest average duration of unemployment since BLS began keeping records in 1948. By comparison, the average duration of unemployment during the 1981-1982 Recession was only about 18 weeks. (Click here for Chart Number 7)
  
  There are only about 3 million job openings available today, making the ratio of unemployed job seekers to available job openings as much as 5 to 1 nationwide and much higher in some states and localities. (Click here for Chart Number 8)
  
  Even if we filled all job openings with unemployment insurance claimants, we still would have about 7 million workers on unemployment compensation and 11 million unemployed workers overall. (Click here for Chart Number 9)
  
  Record numbers of workers are being served by workforce programs -- the most recent data available show almost 31 million workers served by the workforce system in the 12-month period ending March 31, 2009. For the same period a year earlier, the workforce system served 19 million persons. (Click here for Chart Number 10)
  
  Employment services have seen a 45 percent increase in persons served for the 12-month period ending March 31, 2009; serving more than 18 million American workers and far exceeding any other employment and training program. For a similar period in 2008, the program served 13 million persons. (Click here for Chart Number 11)
  
  The number of persons served in the Workforce Investment Act (WIA) Adult program has skyrocketed by 110 percent. Over the four quarters ending March 31, 2009, the WIA Adult program served 4.6 million participants compared to 2.1 million participants over a similar period in 2008. (Click here for Chart Number 12)
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