Jobless benefits running out for 1.3M

Many move in with families, live on savings

Mike Allen sits in his living room with boxes of his family’s belongings in this July 31 file photo during a moving day at his home in Murrietta, Calif. He has received about 13 weeks of unemployment benefits and isn’t eligible for more. More than 1.3 million U.S. residents will exhaust their unemployment benefits by year’s end.

? Jobless since January, Donald Money has already moved in with his elderly parents, stopped going to the movies and started using less of his prescription medication so it will last longer.

This month, something else will fall by the wayside: Money’s unemployment check. The 43-year-old former printing press operator is among the more than 1.3 million Americans whose unemployment insurance benefits will run out by the end of the year, placing extra strain on an economy that is just starting to recover from the worst downturn in a generation.

Of America’s 14.5 million jobless, these are the ones whose benefits are drying up — in some cases after a record 18 months of government support.

The government said Thursday that 570,000 laid-off workers filed new claims for unemployment benefits last week, while the number of people receiving benefits has risen to 6.23 million.

The Labor Department is expected to report today that the August unemployment rate rose to 9.5 percent, up from 9.4 percent in July.

In the past year, nearly 5.5 million people exhausted their 26 weeks of standard benefits without finding work. The government says the “exhaustion rate” is the highest on records dating from 1972.

The government does not track how many jobless Americans have exhausted both their standard and extended benefits, but experts estimate the figure to be nearly 100,000 — and rising.

According to the National Employment Law Project, more than 402,000 Americans will exhaust their unemployment benefits by September’s end. That figure will more than triple by December’s end unless Congress — or individual states — authorizes another extension.

Legislation has been introduced to provide an additional 13 weeks of unemployment benefits in states with high jobless rates; the bill, introduced by Rep. Jim McDermott, D-Wash., has 23 co-sponsors, including two Republicans.

Unemployment benefits play an important part in stabilizing the economy because recipients tend to spend their weekly checks rather than saving the money. Trying to maintain a good attitude is key, said Mike Allen of Riverside County, Calif., who received about 13 weeks of unemployment benefits earlier in the year. He wasn’t eligible for more because he owned his own business and didn’t pay enough into the unemployment fund to qualify for more assistance.

Allen, who is 41, moved his wife and 15-year-old daughter into his parents’ home in early August.

After their mortgage company refused to work with them on a loan refinancing, the family walked away from their home, which is several hundred thousand dollars underwater. Allen, formerly the owner of a trucking company, owes about $500,000 in business loans. He’s traded in his newer cars for a used Jeep that needs $2,400 of repairs. The family sold most of their furniture.

His one bright spot: Allen has launched two employment-related Web sites in hopes of generating money through online advertising.

“We don’t dwell on the past,” said Allen, who added that his Christian faith is seeing them through. “We can’t change it. We can only change our future.”