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President Biden is calling on Congress for long-overdue reforms to the country’s outdated unemployment insurance (UI) system so that people out of work through no fault of their own get the help they and their families need to tide them over until they can get back to work. 1/12
While policymakers have expanded UI eligibility and enhanced benefits in the COVID-19 emergency, these measures are temporary. Permanent reforms are needed to fix an underlying system in which too many unemployed workers get inadequate benefits or no benefits at all. 2/12
e.g., 74 percent of the 17.4 million ongoing claims for unemployment benefits in the week ending 4/3 were in temporary pandemic programs that expanded eligibility and provided additional weeks of benefits beyond what the regular state UI programs provide. 3/12
Created in 1935, UI was designed for the industrial labor force of the time composed of male breadwinners, whose unemployment spells were typically temporary layoffs from an employer experiencing a business downturn to which they expected to return when business improved. 4/12
In a diverse modern economy with more working mothers, greater job turnover, and more people working part-time or holding multiple jobs, outdated requirements have limited UI eligibility for yrs. The # of workers who don’t qualify for UI (eg “gig” workers) is also growing. 5/12
To avoid raising employer taxes after the Great Recession, states cut benefit levels and max # of weeks of available benefits and began to deny benefit claims at higher rates. Nationally, UI receipt as share of total unemployed fell to historic lows <30 percent after 2010. 6/12
In 2019, only 9 states had recipiency rates above 40%, topped by NJ (60) and MA (52); 17 states had rates below 20%, with NC (9), FL and MS (10), and LA (11) at the bottom. 7/12
Several states offer fewer than the standard maximum of 26 weeks of regular state benefits. https://www.cbpp.org/research/economy/how-many-weeks-of-unemployment-compensation-are-available 8/12
At start of recession in Feb ’20, avg wkly UI benefits nationwide were $387 and ranged from a high of $550 in MA to lows of $215 in MS and $161 in PR. Labor Dept analysis finds that avg wkly UI benefits replaced only 45 percent of wages nationwide but <40% in 26 states. 9/12
Low-paid workers, women, and workers of color remain disproportionately harmed by the UI system’s inadequacies.
Women were 47 percent of unemployed workers in Feb ’20 before the recession, but only 35 percent of UI recipients… 10/12
Women were 47 percent of unemployed workers in Feb ’20 before the recession, but only 35 percent of UI recipients… 10/12
… Workers of color experience higher rates of unemployment than white workers in good labor markets and bad and live and work disproportionately in states with the weakest UI systems. They are thus less likely to get benefits, and benefits they do get are miserly. 11/12
No matter what the state of the national economy, losing a job is devastating for low-paid workers with few assets, many of whom will get little or no UI. Congress should heed President Biden’s call for fundamental reforms to create a more robust and equitable UI program. 12/12
