Updated on July 2, 2009. >
"Going out of business"> signs and long lines at the unemployment office used to seem like archival images from the Depression era. Not anymore.
The Bureau of Labor Statistics (BLS) reported Thursday that 467,000 people lost their jobs in June, up from 322,000 in May, for a total of 6.5 million jobs lost since December 2007. Now, the unemployment rate stands at 9.5%, the highest level in nearly 26 years. A separate report showed that more laid-off workers were seeking benefits. On Thursday, the Labor Department reported that the number of newly laid-off workers applying for benefits hit 614,000 for the week ending June 27, up by 2,000 from two weeks prior, and up from 405,000 from a year ago.
Beth Ann Bovino, a senior economist at Standard & Poor's, says she projects unemployment to peak at 10.6% in the second quarter of 2010. Few sectors are immune to the economy's woes and even those that are still hiring like health care, the government and higher education may soon stop given their increasingly strained budgets, says Perry Wong, senior managing economist at Milken Institute.
Even President Obama's $787 billion economic stimulus package, which aims to create jobs through the funding of infrastructure, mass transit and energy projects, may not help to slow down unemployment until early- to mid-2010, Bovino says.
For those who have lost their job -- or fear they're about to -- here are some ways to help you cope financially and get back on your feet.
Negotiate your severance package
While not required to do so by law, many employers offer severance packages to laid-off employees. Pay is usually based on the employee's length of service -- while some are entitled to two weeks' worth of pay, other, more seasoned employees receive as much as a year's worth.
If you've only been working at your company for a year or two there are ways to wring a little more pay from your employer. First, ask that any unused vacation days get tacked onto your final paycheck (you can also try to do this with sick days, but it's often a longshot). If you have a stellar track record with the company, it's also worth asking for more severance pay or an extension of your health coverage.
File for unemployment benefits right away
Individuals who don t receive severance when they lose their job should file for unemployment right away since it usually takes a few weeks for the check to arrive, says Maurice Emsellem, policy co-director at the National Employment Law Project. The rules vary by state, but those who are receiving severance, may still be entitled to unemployment benefits, says Emsellem. In some cases, former employees who receive severance may have to wait until their payments cease before they can receive unemployment benefits.
To learn more about the stimulus package, read our story here.
To find out what you're entitled to, check your state's unemployment program at CareerOneStop, a site sponsored by the Labor Department.
Seek the most affordable health coverage
Losing your job usually means losing your health coverage. If you can't sign onto a spouse's employer-sponsored health plan, consider either extending your previous coverage through COBRA or buying an individual policy.
Under COBRA, workers keep the coverage they had through their employers without worrying about getting turned down due to illness or a pre-existing condition. While it's a pricey option -- you ll pay the entire premium plus a 2% administrative fee, which for a family could top $1,000 a month laid-off workers who sign up for COBRA will receive a 65% subsidy on premiums for up to nine months under the stimulus package.
If you're young, in good health and just want coverage for medical emergencies, you may want to consider buying private insurance, says Ted Toal, a certified financial planner at Triton Wealth Management. These health plans have lower premiums but carry higher deductibles.
For more, see our story on hanging onto your health coverage in tough times.
Tap into job-hunting help
Finding a new job is tough enough, but trying to find one when the job market is being decimated can feel impossible.
To help you get back on your feet, take advantage of government programs that offer job training and search assistance. The stimulus plan includes $4 billion in adult and youth job training and $500 million for state employment agencies to help the unemployed find job openings. Visit so-called one-stop career centers that are run by state and local governments. Services vary by center, but can include access to personal computers and job databases, interview preparation and training events. To find a one-stop career center, visit servicelocator.org.
Also, see our story on more places to seek job-hunting help.