Surviving on Unemployment
In This Chapter
- Determining if you’re eligible for unemployment
- Making the most of your unemployment compensation
- Staying competitive while you’re unemployed
- Landing a new position
If you’re unemployed, you’re in good company. Despite an improving job market, 8 million Americans were unemployed at the end of the first quarter of 2016.
As you read in Chapter 9, the job market, like many other aspects of the economy, is cyclical. If you’re not working right now, don’t assume you won’t be able to find a good job in the future. The U.S. Bureau of Labor Statistics (BLS) estimates that 20.5 million new jobs will be added between 2010 and 2020 and that 657 out of 749 identified occupational groups would grow.
In this chapter, we look at the importance of saving money and stretching your cash while you’re unemployed. We also look at some job areas that are on the rise and share some tips for successful job hunting.
The History of Unemployment Compensation
Unemployed workers in the United States have been covered by the Federal-State Unemployment Insurance Program since 1935, when President Franklin D. Roosevelt signed the Social Security bill that contained provisions for unemployment compensation. Wisconsin had enacted a state unemployment insurance plan 3 years earlier in response to the Great Depression, during which 1 in 4 Americans were out of work.
Definition
Unemployment compensation is temporary income support in the event that you lose your job due to circumstances that are not your fault. The income is meant to tide you over until you find a new job.
Prior to the depression, some industrial workers who belonged to trade unions were guaranteed unemployment compensation by their employers as part of their union contracts.
In Switzerland, unemployment insurance plans were put into place by trade unions as early as the late 1700s, and other parts of Europe followed suit in the 1800s and early 1900s.
Although some opposed the Unemployment Insurance (UI) program as part of the Social Security bill, it was recognized that people lose their jobs even in economically prosperous times and could be at risk for great economic hardship. The law has stood in place ever since.
Pocket Change
For more on the history of unemployment insurance and compensation, go to the Social Welfare History Project website at socialwelfarehistory.com/social-security/social-security-unemployment-insurance.
Accessing Unemployment Compensation
If you have never had a job, you won’t be eligible for unemployment benefits because they are intended for people who were working and lost their jobs through no fault of their own. If you were working and no longer are because you were laid off or the company that employed you closed, you might be eligible for compensation.
Unemployment compensation is a joint federal-state program. Every state offers unemployment benefits to qualified workers, but rules regarding compensation vary from state to state. You’ll have to check on regulations that apply to your particular state if you’re attempting to collect.
To be eligible for benefits, you must have worked in a qualifying position and for an employer who is covered by the UI program. You and your employer must have contributed to the unemployment compensation fund through payroll deductions.
If you lose your job, you’ll need to file a claim with your state UI program. You can access your state’s unemployment program and find out how you need to file your claim online. Some states require that you file in person, while others allow you to do so on the phone or online. Check your state unemployment office to find out for sure.
You’ll need to provide some information such as the dates you worked and your employers’ address(es). Your state’s unemployment program will determine how much compensation you’re eligible for, based on how much you earned during a specified time period. Once you’re approved for unemployment compensation, you’ll be required to file every week or every other week and report anything you earn while you’re collecting.
In most states, it takes 2 or 3 weeks after you file for unemployment compensation to get your first check. If you lose your job and don’t have an emergency fund, you’ll need to figure out how you’ll support yourself and pay your bills if your income is interrupted. Getting behind could set you up for financial problems in the future.
Regulations regarding working part-time while you’re collecting unemployment benefits vary from state to state, so be sure you know what regulations apply to you. Many states let you work and still collect a portion of your benefits, and that may be beneficial because a part-time job could lead to networking opportunities and perhaps even a full-time job.
If you do get part-time work, you need to report how much you’re earning when you file for your unemployment each week. If you earn more than your current benefits amount, you probably won’t qualify for unemployment that week. Every state has a formula that determines how benefits are adjusted if you’re earning money in a part-time job.
Also, your state might require you to register with your state employment center, which may be able to help you find employment. If you are instructed to register and fail to do so, you could lose your benefits.
Money Pit
If you’re receiving unemployment compensation and you get a part-time job, do not be tempted to try to hide the fact when you file for benefits. That’s unemployment fraud and can get you into a lot of trouble. Most employers notify states when they make a hire, so it’s likely your employment status will be known. Many states encourage residents to report unemployment fraud, so don’t take any chances. You’re required to report income even if you’re being paid “under the table.”
If You’re Denied Benefits or Your Benefits End
Your state unemployment office determines if you’re eligible for benefits. If you are denied benefits, you have the right to appeal to try to get them started or reinstated. You’ll find information on how to do that on your state’s unemployment office website.
If you quit your job, you might still qualify for unemployment, but it varies by circumstance, and different states have different regulations.
Workers who leave a job simply because they don’t like it or just don’t feel like working any more are unlikely to qualify for benefits. In some cases and in some states, however, certain situations may qualify you for unemployment:
Illness or injury If you need to stop working because you get sick or are injured, you can still qualify for unemployment in some states. This is particularly true if you were injured or became ill as a result of the job you were doing.
Family responsibilities If you have a family member who is very ill and you quit your job to care for him or her, you may qualify for benefits. Rules vary from state to state regarding the relationship and severity of illness.
Intolerable conditions If your employer constantly sexually harasses you or makes advances toward you, you probably will qualify for unemployment compensation if you quit. The same goes if you’re being pressured to do something that’s illegal as part of your job or being forced to work in dangerous conditions.
If you are fired from your job, you may or may not be eligible for unemployment benefits. In many states, an employee who is let go because he or she is simply not a good fit will be eligible for benefits. If you are fired for a more serious cause, however, it’s likely you won’t be able to get unemployment—at least not right away. Some examples of misconduct that are likely to disqualify you for benefits include the following:
Committing a crime Stealing from your employer, intentionally injuring a coworker, or destroying company property will pretty much rule out any chance of receiving unemployment compensation.
Failing a drug test Employees who fail a drug test are not eligible for unemployment in most states. Refusing to take the test also can be disqualifying.
Breaking the rules If you get fired for violating safety rules or simply refuse to follow stated company policy, it’s likely that your unemployment claim will be denied.
In most states, you can receive unemployment benefits for a maximum of 26 weeks. Hopefully, you’ll find a job long before your benefits end, but if not, you may qualify for Extended Benefits (EB). You’re more likely to get EB if your state has a high rate of unemployment. Be sure to ask about EB if you haven’t found a job and your compensation is about to end.
Stretching Your Compensation Dollars
Your unemployment compensation will be less than your salary, so you’ll have to figure out how to stretch the dollars you get. Hopefully, you have an emergency fund to help get you by until you’re working again, but ideally, you’ll use as little of that fund as possible.
Dollars and Sense
You can get a rough idea of how much weekly employment compensation you’ll get by figuring out how much you earned during the yearly quarter when your income was highest. Divide that amount by 13, which is the number of weeks in a calendar quarter. Plan on getting about half of what your weekly income was while you were working. Not every state uses the high-quarter method to calculate what you get, but a majority does.
You can read all about trimming costs in Chapter 12. Remember that although some expenses are necessary, others are not. If you’re living on your own, you need to keep coming up with rent money. You still have to pay for utilities, insurance, your car loan, food, and so forth. These are nondiscretionary expenses.
If you’re paying back federal student loans, you might be able to adjust or delay your repayments, so be sure to inquire. You also can save money by cutting down on discretionary expenses, which are those such as vacations and entertainment.
It’s easy to overspend when you’re around people who have more money than you do. Resist spending more than you should to “keep up,” and leave your credit card at home when you’re out with your friends.
Take a little time to review Chapter 3, and try to think of areas in which you can cut back until you’ve found another job.
Staying in the Game While You’re Unemployed
Different people approach unemployment in different ways. Some need time to get used to the idea and go into retreat mode, while others face their unemployment head-on and make finding a new position their “job.”
If you lose your job and need a little time to lie on the couch and watch TV, that’s not the worst thing in the world. Soon, however, you’ll need to pick yourself up, dust yourself off, and get back in the game.
If you’re looking for a job in the same field in which you were previously employed, start working any contacts you have. Let people know you’re looking, and ask if you can submit a résumé. Get online, see what jobs are available, and apply.
If you’re thinking of shifting into a different field, use some of the time you have to identify areas that are experiencing job growth. The U.S. Bureau of Labor Statistics (BLS) has identified the job areas that will be the fastest growing—both in terms of jobs added and salary increases—between the years of 2014 and 2024:
- Wind turbine service technicians
- Occupational therapy assistants
- Physical therapist assistants
- Physical therapist aides
- Home health aides
- Commercial drivers
- Nurse practitioners
- Physical therapists
- Statisticians
- Ambulance drivers and attendants
- Occupational therapy aides
- Physician assistants
- Operations research analysts
- Personal financial advisers
- Cartographers and photogrammetrists
- Genetic counselors
- Interpreters and translators
- Audiologists
- Hearing aid specialists
- Optometrists
- Forensic science technicians
- Web developers
- Occupational therapists
- Diagnostic medical sonographers
- Personal care aides
- Phlebotomists
- Ophthalmic medical technicians
- Nurse midwives
- Solar photovoltaic installers
- Emergency medical technicians and paramedics
Find more information about job growth, salaries, and other employment related issues at bls.gov.
Pocket Change
According to CareerCast (careercast.com), 10 jobs in which millennials are seeing the greatest gains are: advertising account executive, civil engineer, computer systems analyst, data scientist, financial planner, market research analyst, physical therapist, social media manager, software engineer, and statistician.
If you’re thinking about changing jobs, Salary.com offers a list of apps and websites to help you. To maximize your chances of finding a job that’s matched to your skills, experience, and interests, consider using it or one or more of the following resources.
Job Mo (jobmo.org) Job Mo uses Google maps to let you search by location and find and apply for jobs on sites like Monster and The Ladders. You also can research companies and check out salary information.
SWITCH (switchapp.com) SWITCH lets you search for jobs from your phone and notifies recruiters and employers if you’re interested. If you’re a candidate, the employer can contact you via the chat feature to set up an interview.
Jobr (jobrapp.com) Jobr lets you create a profile, post your résumé, and interact with a job concierge who can answer any questions.
LinkedIn (linkedin.com) LinkedIn is a favorite website of employers, so you’ll definitely want to get your profile on it. Then use the LinkedIn Jobs page to search for openings.
Jobcase (jobcase.com) Jobcase is a website recommended for people who don’t have a 4-year degree or a fancy résumé but have worked and have some job experience. It posts listings for hourly work and can connect you to mentors who can answer questions and provide direction.
Finding Job-Hunting Help
Even if your state unemployment office doesn’t require you to register with your state employment center, you may be able to get some assistance there with your job hunt.
If you’re not quite sure where you’d like to be headed, you might consider seeking the services of a career counselor. A career counselor does not go out and find you a job, but he or she can help you evaluate where you are, where you’ve been, and where you’d like to go.
You may be able to access the services of a career counselor for free at your college. If you don’t live near your alma mater, a community college or other organization in your area may offer career counseling at no cost.
Another source of job-hunting help is a headhunter. If you seek the services of a headhunter, be aware that the headhunter’s first loyalty is to the company seeking an employee, not to you. Normally, the company hires and pays the headhunter, although in some cases you’ll be charged, so it’s important to ask. If you decide to try a headhunter, be sure to check around and find one who is reliable and reputable.
Definition
A career counselor is a certified individual who can help you clarify your career goals, assess your abilities and aptitudes, provide information about different careers, develop an individualized career plan, help you create a résumé, and teach you skills and strategies for job hunting. A headhunter matches you with a company that’s looking for someone to fill a particular position. He or she also handles negotiations between a prospective employee and the company.
The Least You Need to Know
- Americans have been relying on unemployment compensation since the 1930s.
- To find out if you’re eligible for unemployment benefits, contact your state’s unemployment office.
- You have the right to appeal if you’re denied unemployment benefits.
- Cutting back on discretionary expenses makes your unemployment benefits go further.
- Be sure you use every resource available to you when you’re hunting for a new job.
- Multiple forms of job-hunting assistance are available if you need it.