This is very positive news for the markets, no need to worry as the printing press will take care of the 2 million peple out of work in California.
Dec 1, 2009 5:55 pm US/Pacific
On The Money: Unemployment Fund Is Broke
California Hemorrhaging Money At Record Pace
Reporting
Mike Luery SACRAMENTO (CBS13)
These are tough times for Glenn Borden, who just got laid off from his truck driving job.
"It's the toughest I've seen in years," Borden told CBS 13, while looking for work at California's Employment Development center in Sacramento.
Glenn Borden is one of two million Californians now out of work. Most are filing for benefits at a time when the state's unemployment fund is in deep trouble.
"We're broke and the hole is getting bigger," said Loree Levy of the Employment Development Department.
Levy explained that California's unemployment insurance fund is now $7.4 billion in the red. California is spending an average of $20 million more each day than it is taking in. And those numbers are likely to get worse, climbing to an estimated $18 billion deficit next year, while ballooning to $27 billion in the hole by 2011. California is in fact, so broke, the state has had to borrow money from the federal government to pay unemployed workers.
As Loree Levy noted, "We're going to owe the federal government a lot of money."
California's unemployment fund is supported entirely by employers, who pay up to $434 per employee. California workers, by contrast, pay nothing into the fund.
In prosperous years, the formula worked, but with one out of every eight Californians now unemployed â the highest on record since World War II, the entire system has collapsed, leaving only two options: either raising the revenue going in, or decreasing the benefits going out.
Employers say they can't afford to pay more into the fund, while unemployed workers say they can't afford to take less in benefits, on average about $312 a week. And they just want a job.
"I've been trying here for at least 3 months now," said Jenaro Jaureguy, who is unemployed. "My last interview wasn't so successful, so I thought I'd try again for the holiday season."
The job market is, "very competitive," said Patrick Graham, an unemployed worker. "Yeah, there's a lot of people out there looking for work."
But California's unemployment fund will continue sinking deeper into debt, until the Legislature comes us with a permanent solution. The state will have to pay the federal government $730 million in interest for the billions we've borrowed to keep the unemployment fund afloat. That loan comes due in 2011 and the state is already drowning in a sea of red ink.
Dec 1, 2009 5:55 pm US/Pacific
On The Money: Unemployment Fund Is Broke
California Hemorrhaging Money At Record Pace
Reporting
Mike Luery SACRAMENTO (CBS13)
These are tough times for Glenn Borden, who just got laid off from his truck driving job.
"It's the toughest I've seen in years," Borden told CBS 13, while looking for work at California's Employment Development center in Sacramento.
Glenn Borden is one of two million Californians now out of work. Most are filing for benefits at a time when the state's unemployment fund is in deep trouble.
"We're broke and the hole is getting bigger," said Loree Levy of the Employment Development Department.
Levy explained that California's unemployment insurance fund is now $7.4 billion in the red. California is spending an average of $20 million more each day than it is taking in. And those numbers are likely to get worse, climbing to an estimated $18 billion deficit next year, while ballooning to $27 billion in the hole by 2011. California is in fact, so broke, the state has had to borrow money from the federal government to pay unemployed workers.
As Loree Levy noted, "We're going to owe the federal government a lot of money."
California's unemployment fund is supported entirely by employers, who pay up to $434 per employee. California workers, by contrast, pay nothing into the fund.
In prosperous years, the formula worked, but with one out of every eight Californians now unemployed â the highest on record since World War II, the entire system has collapsed, leaving only two options: either raising the revenue going in, or decreasing the benefits going out.
Employers say they can't afford to pay more into the fund, while unemployed workers say they can't afford to take less in benefits, on average about $312 a week. And they just want a job.
"I've been trying here for at least 3 months now," said Jenaro Jaureguy, who is unemployed. "My last interview wasn't so successful, so I thought I'd try again for the holiday season."
The job market is, "very competitive," said Patrick Graham, an unemployed worker. "Yeah, there's a lot of people out there looking for work."
But California's unemployment fund will continue sinking deeper into debt, until the Legislature comes us with a permanent solution. The state will have to pay the federal government $730 million in interest for the billions we've borrowed to keep the unemployment fund afloat. That loan comes due in 2011 and the state is already drowning in a sea of red ink.
