Dayton Daily News...
Jobless claims up for higher earners
Low-income workers still dominate the statewide jobless rolls.
By Randy Tucker

October 10, 2011 

DAYTON — Nearly 14 million Americans and more than 500,000 Ohioans remain unemployed, and many are struggling to pay bills and put food on the table with unemployment benefits that don’t come near their former incomes. 

But it’s not only low-wage workers who are receiving unemployment benefits. Higher-income employees have been hit hard in recent years as well. 

A Dayton Daily News analysis of unemployment compensation reported on federal income tax returns found that Ohio individuals and households with adjusted gross incomes of $50,000 and up claimed a combined $754 million in unemployment benefits in 2009, the most recent year for which numbers were available. 

That was less than half the $2.3 billion in unemployment compensation claimed by taxpayers with incomes less than $50,000. But claims for unemployment benefits among upper-income taxpayers rose 176 percent from 2007, when the recession began. 

“This tells you just how severe this last recession was, because it reached all the way up the income brackets,” said Jim Brock, a Miami University economics professor. “With the exception of Donald Trump and people like that, no income class was immune from the Great Recession.” 

The Labor Department’s jobs report Friday showed little relief from high unemployment. 

The national unemployment rate in September remained stuck at 9.1 percent, even though employers added 103,000 nonfarm jobs. 

The jobs count for September included 45,000 Verizon Communications workers who were previously on strike in August. Without those workers, the net gain in employment was only 58,000 jobs. 

There were other signs of weakness as well. 

Manufacturing, which has been one of the few bright spots in an otherwise anemic recovery, shed 13,000 jobs last month on top of a decline of 4,000 in August. 

While unskilled and low-wage workers are still more likely to be laid off than executives and office workers, a closer look at the tax return data shows job losses may be more evenly spread than some might expect. 

For example, a slightly higher percentage of Ohio households in the $50,000-to-$75,000 income bracket reported receiving unemployment compensation in 2009 than the percentage of taxpayers with incomes of $50,000 and below. 

For upper-income taxpayers who lose their jobs, the impact can be even more devastating than for lower- and middle-income families, said Bill Even, another Miami University economics professor who studies wage trends. 

“Unemployment insurance covers a much smaller share of the unemployment risk for high-income people,” Even said. 

“If you’re low-income, you might get over half of your earnings back in unemployment insurance. If you’re high income, you might get a tenth of your earnings back. So, in some ways, (unemployment) might be a smaller shock for a lower-income person than a high-income person.” 

In addition, Even said, much of the rise in unemployment compensation for lower-income groups – which have seen the sharpest increase in benefits since the recession began – can be attributed to high-income taxpayers falling back into lower-income tax brackets. 

There’s a good chance of that happening for many unemployed workers, who saw the average duration of unemployment reach an all-time high last month of 40.5 weeks, according to the Bureau of Labor Statistics. 

Even if they find work, many displaced workers are likely to take a large pay cut. 

The number of people working part-time because they were unable find a full-time job jumped to 9.3 million in September, the Labor Department reported. 

Pam Walker, who coordinates the Job Seekers Group at Fairhaven Church in Centerville, said underemployment can have a devastating impact on middle-class families. 

“We’ve seen everything from people having to unload cars and become one-car families to their kids having to drop out of college,” Walker said. 

“But what we see even more than the financial component is the emotional component. We see a lot of depression and a lot of people who have given up hope who were formerly very successful.” 

Read this and other stories at the Dayton Daily News