CNN: Furloughed Federal Employees Will Get Unemployment Benefits, Undercutting Sequestration
The pity party for furloughed federal employees should be toned down. A story at CNNMoney.com notes something I don't expect will be only rarely be reported anywhere else, namely that there has been a concerted and likely largely successful effort on the part of federal employee unions to ensure that as many of their members as possible will be eligible to collect unemployment benefits during their time off. I would expect that those who don't have union representation are also attempting to imitate what the unions are doing whenever and wherever possible.
It's pretty safe to say that extra spending on unemployment benefits wasn't treated as a partial offset to estimated savings resulting from sequestration. CNN Money's coverage of one instance of this kind of maneuvering makes it clear that the total dollar amounts aren't small in a federal workforce of 4.4 million. Excerpts follow the jump (bolds are mine):
Furloughed federal workers can collect unemployment
Should federal employees on furlough be allowed to collect unemployment benefits? Workers at a Navy engineering station in Philadelphia think so.
The local union affiliate of International Federation of Professional & Technical Engineers has signed an agreement with the Navy which would allow their civilian federal workers to group furlough days in one-week blocks. It's a strategy with one key goal: enable those employees to recoup some of their lost wages through unemployment checks.
Here's how it works.
Bill Coleman, a mechanical engineer who works for the Navy, makes around $104,000 a year, before taxes. Like most Department of Defense employees, he expects to be furloughed for 11 days between July and September. He will lose roughly $4,400 in pay during that stretch.
If his furlough days are scattered throughout the three month period, he will not qualify for unemployment benefits in Pennsylvania. Workers in that state cannot earn more than $745 in one week and still qualify for unemployment benefits.
Based on government pay grades, the Pennsylvania Department of Labor and Industry estimates most federal employees will not be eligible for benefits unless they work less than 28 hours per week. Indeed, if Coleman works just four days a week -- he would surpass the $745 limit.
However, the scenario changes completely now that Coleman can group his furlough days together in five-day blocks. In that case, he will lose a full week of wages at a time, and the state would consider him like any other worker on a temporary layoff. Coleman hopes this will allow him to collect roughly $1,100 in unemployment checks this summer.
... Nationwide, it's unclear how many federal employees will be eligible for unemployment benefits. The furlough arrangements vary by agency and unemployment rules differ widely by state.
It's also controversial. After all, the furloughs were intended as a budget-cutting mechanism. Doesn't paying unemployment benefits defeat the purpose of the furloughs in the first place?
To that, workers point out they're recouping only a fraction of their pay.
"It's not a pound for a pound thing. It's essentially something people get in order to live on while they're going through this tough time," said Gregory Junemann, international president of the IFPTE union. "Remember, these are essentially middle class people. They don't take this money and invest it in property in the Bahamas. They're buying groceries."
Paraphrasing the late Illinois Senator Everett Dirksen ("A billion here, a billion there, and pretty soon you're talking about real money"): $1,100 here, $1,100 there, and pretty soon you're losing a lot of the sequestration savings you thought you were going to achieve."
I don't expect that there will be any state or federal effort to push back against this gambit. I suppose it's futile to argue that the unemployment benefits system should never have been revised to include people who are put out of work for just a few days and haven't even lost their jobs. Unfortunately, many if not most states already allow that to happen, so furloughed federal employees' benefit applications will more than likely sail through without a challenge.
As an aside, they may also skew the weekly initial jobless claims statistics upward.
An additional aside: If you're making $104K per year and you're really worried about eating if the gravy train stops for even a few days, Uncle Sam isn't the only one with a basic budgeting problem.
Cross-posted at BizzyBlog.com.