Unemployment Insurance And What Happens To People Who Run Out

David Arrieta said he received his final $214 unemployment insurance check last week after losing his office manager job in August 2010.

"Hopefully I'll get hired," Arrieta said. "Hopefully we can rebound."

In case that doesn't happen right away, Arrieta, who lives in Scottsdale, Ariz., with his wife and three kids, said he cashed out his retirement account and is in the process of selling off personal possessions so his family can move into more affordable housing.

Millions of people have run out of unemployment insurance without finding work since the start of the Great Recession in 2007, and the government wants to know: What happens to them? Many politicians have worried the long-term jobless will wind up in another part of the safety net; others assume the unemployed are holding out for high-paying jobs and will take what they can get when their benefits run out. Available data show neither scenario offers a complete picture.

According to a new report from the Government Accountability Office, about a third of people who run out of benefits do find jobs, while another third of households benefit from one safety net program or another. The other third comprises people like Arrieta, who get by with family support while hoping for a rebound.

Using the most recent available data, the GAO found that of the 2 million people who lost jobs and ran out of unemployment insurance from 2007 to 2009, only 35 percent had found work by January 2010. Eighteen percent left the workforce and 46 percent remained totally unemployed (twice the jobless rate for "exhaustees" before the recession). Just 18 percent received some type of Social Security benefit and 15 percent received food stamps. Less than 3 percent landed on welfare. (Other studies have suggested the economy is pushing new waves of workers onto Social Security disability rolls.)

Several states last year checked in on people who ran out of benefits and came up with similar results. Twenty-seven percent of Nevadans who ran out of unemployment insurance landed in another part of the state's safety net, according to a November 2011 report. And state payroll records in Connecticut and Washington show that at most 35 percent of exhaustees had landed jobs after their unemployment income disappeared.

While most exhaustees face difficult financial circumstances, they aren't necessarily thrown into abject poverty. The GAO found that two-thirds lived with a household member who earned some money in 2009, and 40 percent had some income from savings, rent, interest or dividends. In total, 90 percent of people who ran out of unemployment insurance had some private income source in their households. The poverty rate for working-age exhaustees was 18 percent, compared with 13 percent for working-age adults overall.

David Arrieta said his household has had steady income thanks to his wife's speech therapy job, which brings in the U.S. median salary of just under $50,000 -- well above the $26,439 poverty threshold for a family of five. He said he also cashed out half of his IRA in order to pay the mortgage. Their income and assets would disqualify them for Medicaid, welfare or food stamps.

Arrieta's is among the 2 million households the White House estimates will run out of unemployment benefits this year. In 2010 and 2011, the Labor Department estimated 1.6 million and 2 million people exhausted their unemployment insurance, respectively. Starting late in 2009, combined state and federal jobless benefits lasted up to 99 weeks in some states (the maximum duration will drop to 73 weeks by the end of this year). As of January 2012, 1.8 million people had been out of work 99 weeks or longer.

Arrieta, 48, said his job search has been dismal, and he suspects his age is part of the reason, though he has no way to confirm it. "I have applied for security, janitorial, oil rig positions and all have replied back thanking me for applying but [saying they] will be seeking other candidates," he wrote in an email.

While his household's income makes his family ineligible for food stamps or welfare, last year they did avail themselves of another part of the safety net: bankruptcy protection. But Arrieta suspects the bankruptcy records are making his job search more difficult. He said that after interviewing for a position with a big professional services firm, the company asked him to explain his bankruptcy, then never made an offer.

Arrieta said he used to earn $55,000 a year. When he finds a new job, he'll likely earn less than he used to. The surveys in Connecticut and Washington found that the majority of re-employed exhaustees earned much less than before they were laid off. And among the 35 percent of exhaustees who had found work by the beginning of 2010, the GAO reports that 71 percent were earning less in their new jobs; of those, half experienced an earnings reduction greater than 26 percent.

Even without knowing the statistics, Arrieta can sense his next salary won't be as high as his last one: "I don't think I’ll find that kind of money again."

Arthur Delaney is the author of "A People's History of the Great Recession," HuffPost's first e-book.