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Jobless rate is bad, but not worst here in the modern era



While Letcher County has the state’s fourth-highest rate of unemployment, the current state of joblessness here is not as bad as it has been at other times in the modern era.

According to statistics released last week by the Kentucky Office of Employment and Training, Letcher County’s unemployment rate for November was 15 percent, up from 14.7 percent in October and 13.9 percent the year before. However, nearly 2,000 more Letcher County residents hold jobs today than they did at times in the mid- to late- 1980s.

During a mining slump in July 1986 for instance, Letcher County’s unemployment rate stood at a whopping 21.5 percent with only 5,560 residents holding jobs — 1,766 less than the 7,326 residents who held jobs in November. The July 1986 jobless rate in Letcher was the state’s third-highest at the time, trailing only Wolfe and Carter Counties. Today,

Letcher’s unemployment rate is better than only Leslie (16.5 percent), Magoffin (15.8), and Harlan (15.6) as the latest prolonged slump in mining leaves coalfield counties with the highest unemployment rates in the state.

Knott County’s unemployment was at 14 percent in November. Bell and McCreary counties were at 13.6 percent each.

Woodford County, in central Kentucky, had the lowest jobless rate in November at 5.9 percent. It was followed by Daviess and Fayette counties at 6.1 percent each. Scott County was at 6.2 percent and Boone County at 6.3 percent.

Ironically, Letcher County jobless rate (not joblessness) is expected to improve over the next few weeks as workers state unemployment benefi ts will be exhausted now that the federal extensions are gone.

The end to the five-year program that extended benefits for the long- term jobless affected 1.3 million U.S. residents immediately and will affect hundreds of thousands more who remain jobless in the months ahead. Under the program, the federal government provided an average monthly stipend of $1,166.

While the Obama administration and Democrats in Congress want to continue the program, the extensions were dropped from a budget deal struck earlier in December and Republican lawmakers have balked at its $26 billion annual cost.

The end of the program may prompt a drop in local, state and national unemployment rates, but not necessarily for a good reason. People out of work are required to look for work to receive unemployment benefits. As benefits disappear, some jobless will stop looking for work out of frustration and will no longer be counted as unemployed.

The trend has already emerged in North Carolina, which started cutting off extended benefits in July. The state’s unemployment rate went down — from 8.8 percent in June to 7.4 percent in November— even though the number of North Carolinians who said they had jobs rose only slightly in that time.

The North Carolina evidence is consistent with the theory that ending benefits will cause some unemployed to drop out of the workforce, said Michael Feroli, an economist at JP Morgan Chase.

That’s what Fed chairman Ben Bernanke meant when he said this month that the end of extended benefits “will bring the unemployment rate down, but for … the wrong reason.”

Some unemployed people said the loss of benefits might drive them to take minimum wage jobs to get by until they can find work at their skill level and in their field.

Richard Mattos, 59, of Salem, Ore., has been out of work since March, when he was laid off as a case manager at a social services organization. Without the unemployment income, Mattos said he and his wife will have enough money for one month’s worth of bills. Almost every day, he visits employment centers run by the state of Oregon or Goodwill Industries International.

“I don’t know what we’re going to do,” he said. “We could end up homeless because of this.”

Since 2008, the federal program paid out benefits to the unemployed after their 26 weeks of state benefits ran out. At its peak, the program offered up to 73 weeks of federal benefits — which are typically offered during periods of high unemployment — to the long-term jobless.

James Sherk, a labor policy analyst at the conservative Heritage Foundation, said ending the extensions could induce workers to take jobs they might have overlooked initially. Extended unemployment benefits can give workers “a false sense of how much time they have before they have to start broadening their net to less than ideal positions,” he said, adding that the labor market, while not ideal, is stronger and continues to improve.

In November, the country’s unemployment rate fell to a five-year low of 7 percent, but is still above the 5 percent to 6 percent rate that would signal a normal job market. And longterm unemployment remains a problem for the economy as nearly 4.1 million Americans have been out of work for six months or more.

Deborah Barrett, a 57-yearold resident of Newport, R.I., is one of them. She was laid off from her management job in accounting in February and has sent out hundreds of resumes since. She said she doesn’t know how she’ll get by without the federal assistance.

“It’s petrifying,” she said. “Unfortunately, I don’t believe my story is very unique.”

Laura Garay, 57, pawned her jewelry, withdrew retirement funds and relied on support from friends after losing her paralegal job in May, the same month she was diagnosed with lymphoma.

Her monthly $1,700 in unemployment covers her house payment in Westminster and the cost of maintaining her health insurance to cover a barrage of exams and radiation therapy.

Garay said her illness set back her job search, but as long as she’s healthy, she’ll work at just about anything to get back on her feet and avoid being jobless for too long.

“You don’t find a job in two weeks, you don’t find a job in three weeks,” she said. “You find a job after months of searching.”

The Associated Press contributed to this report.



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