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State Unemployment Insurance Systems Failing Workers, Report Says
Unemployment insurance is supposed to be a safety net for workers who lose their jobs, but a new state-by-state study suggests that the net is old, flimsy and full of human-sized holes.
The report, by economists and public policy experts, gives 23 states an “F” for their unemployment systems overall and flunks 48 states and the District of Columbia in the area of eligibility, as many low-wage and part-time workers don’t qualify.
The report came out shortly after both houses of Congress finally agreed to extend unemployment benefits for laid-off workers to 39 weeks from 26 weeks. Big business lawmakers had stalled the aid for months by demanding that any economic relief include huge corporate tax breaks. President George W. Bush signed the compromise bill in March.
“The additional aid is a step in the right direction,” CWA President Morton Bahr said. “But it doesn’t begin to address the inadequacies of the unemployment system as a whole. We hope this important study will be a catalyst for change.”
Bahr is a member of the AFL-CIO Executive Council, which commissioned the study from the Economic Policy Institute, the Center on Budget and Policy Priorities and the National Employment Law Project.
“Failing the Unemployed: A State-by-State Examination of Unemployment Insurance Systems” looks at five key factors that determine whether working families can count on help: eligibility standards, benefit levels, revenue, trust fund adequacy, and recession preparedness.
Only two states, Rhode Island and Vermont, received a passing grade on eligibility. Overall, only 40 percent of workers receive benefits when they lose their jobs, meaning most of the jobless population won’t be helped at all by the bill authorizing extra weeks of aid.
The report says some states automatically disqualify part-time workers, others set up earnings requirements that are difficult to meet and many states do not count recent earnings in the benefit calculations.
“Unemployment benefits are not charity,” AFL-CIO President John Sweeney said. “Unemployment insurance premiums are paid for every employee in this country, and just like medical or car insurance pays for an illness or accident, unemployment benefits are designed to help working families when a worker loses his or her job. But this crucial system fails
more often than it works.”
But even workers who receive benefits struggle. In eight states, even the maximum weekly benefit is too low to keep a family out of poverty. In six other states maximum benefits put a family of
three just $10 per week above the poverty line.
Under the study’s criteria, states needed passing grades in only three of the five categories to earn a passing grade overall. Yet nearly half flunked. They are: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Nebraska, New Mexico, North Carolina, North Dakota, Tennessee and Virginia.
The report recommends expanding benefit eligibility to include more workers, increasing benefit levels, and ensuring that states’ unemployment insurance tax polices — which lowered employer obligations in recent years — are more balanced to ensure adequate funding for the system.
The report, by economists and public policy experts, gives 23 states an “F” for their unemployment systems overall and flunks 48 states and the District of Columbia in the area of eligibility, as many low-wage and part-time workers don’t qualify.
The report came out shortly after both houses of Congress finally agreed to extend unemployment benefits for laid-off workers to 39 weeks from 26 weeks. Big business lawmakers had stalled the aid for months by demanding that any economic relief include huge corporate tax breaks. President George W. Bush signed the compromise bill in March.
“The additional aid is a step in the right direction,” CWA President Morton Bahr said. “But it doesn’t begin to address the inadequacies of the unemployment system as a whole. We hope this important study will be a catalyst for change.”
Bahr is a member of the AFL-CIO Executive Council, which commissioned the study from the Economic Policy Institute, the Center on Budget and Policy Priorities and the National Employment Law Project.
“Failing the Unemployed: A State-by-State Examination of Unemployment Insurance Systems” looks at five key factors that determine whether working families can count on help: eligibility standards, benefit levels, revenue, trust fund adequacy, and recession preparedness.
Only two states, Rhode Island and Vermont, received a passing grade on eligibility. Overall, only 40 percent of workers receive benefits when they lose their jobs, meaning most of the jobless population won’t be helped at all by the bill authorizing extra weeks of aid.
The report says some states automatically disqualify part-time workers, others set up earnings requirements that are difficult to meet and many states do not count recent earnings in the benefit calculations.
“Unemployment benefits are not charity,” AFL-CIO President John Sweeney said. “Unemployment insurance premiums are paid for every employee in this country, and just like medical or car insurance pays for an illness or accident, unemployment benefits are designed to help working families when a worker loses his or her job. But this crucial system fails
more often than it works.”
But even workers who receive benefits struggle. In eight states, even the maximum weekly benefit is too low to keep a family out of poverty. In six other states maximum benefits put a family of
three just $10 per week above the poverty line.
Under the study’s criteria, states needed passing grades in only three of the five categories to earn a passing grade overall. Yet nearly half flunked. They are: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Nebraska, New Mexico, North Carolina, North Dakota, Tennessee and Virginia.
The report recommends expanding benefit eligibility to include more workers, increasing benefit levels, and ensuring that states’ unemployment insurance tax polices — which lowered employer obligations in recent years — are more balanced to ensure adequate funding for the system.