TALLAHASSEE — Florida's improving unemployment rate may be good news for most people, but it will have a negative effect on many of the estimated 836,000 workers who remain jobless.
That's because Florida no longer qualifies for federal extended benefits because of its lower jobless rate, which is likely to reduce state benefits as well.
Those two factors are compounded by the impending expiration of federal emergency unemployment compensation at the end of the year.
Unless Congress extends the emergency benefits, the net effect could be a reduction in combined state and federal compensation, which once offered up to 99 weeks of benefits, to 20 weeks or less for Florida workers who lose their jobs in 2013 or beyond. Those currently drawing compensation or who apply before the end of this year are facing less drastic reductions.
The reductions in all three elements of Florida's unemployment compensation system are tied to the same thing, said Florida AFL-CIO legislative and political director Rich Templin.
"That is a failure of leadership in Washington and leadership in Tallahassee to deal with the real problem of unemployment, which is the chronic unemployment that we're seeing because of major economic shifts," Templin said.
Unemployment rates are falling in part because Florida's labor force is shrinking as long-term unemployed workers drop out of the system, Templin said.
The Florida Chamber of Commerce pushed for the state benefit reductions. The chamber's executive vice president, David Hart, said the falling unemployment rate shows Florida is making the right policy moves to create jobs and bring the state out of recession.
Federal extended benefits that provided up to 20 weeks of compensation will be cut off on May 12, state officials said. Florida lost eligibility for that funding when its March unemployment rate dropped to 9 percent.
Federal emergency unemployment compensation, which is due to expire at the end of 2012, once offered up to 53 weeks of benefits. Each week that goes back is one less week of benefits until they are completely cut off at the end of 2012.
Florida Department of Economic Opportunity spokeswoman Nancy Blum said her agency is sending letters about the end of extended benefits to those long-term jobless workers who currently qualify as well as those who soon would have become eligible after using up their other benefits. The department has estimated those two groups total about 44,000 claimants.
Maximum state benefits, which kick in first, already have been cut from 26 to 23 weeks. That's likely to be reduced again in 2013 under a new law linking time of compensation to the unemployment rate. The maximum benefit is 12 weeks if the jobless rate averages 5 percent or less in the third quarter of the prior year. For every half percentage point above 5 percent, a week of benefits is added until reaching the 23-week cap at 10.5 percent.
That means even if the 9 percent jobless rate recorded in March remains unchanged through the third quarter, the maximum benefit would drop to 20 weeks next year.
The new law was sought by business interests, and supported by Gov. Rick Scott, to reduce the cost of the compensation program and hold down taxes paid by employers to sustain it.
Those taxes have skyrocketed as jobless rates climbed in recent years. The state also borrowed from the federal government to keep the taxes from going even higher.
The new legislation also makes it more difficult for claimants to qualify for benefits and easier for employers to deny them for misconduct.
Templin said reducing benefits is counterproductive because state figures show every $1 paid out generates $1.65 in economic activity.
"Every unemployed worker who does not qualify for those lifeline benefits is a lost customer at the cash register," he said. "Every lost customer at the cash register is more jobs lost."
The Chamber of Commerce's Hart said the best remedy would be creating more jobs by cutting taxes and business regulations rather than paying employment benefits.
"We would all hope the customer coming into the store and contributing to the economy is doing so because they are fully employed," Hart said.