Dollars & Sense: Unemployment Compensation: A Broken System

[marmar]

Unemployment Compensation: A Broken System
By Marianne Hill


Millions of workers have lost their jobs in the current recession. Employment is down 12% in manufacturing, 7% in professional and business services, and more than 5% overall in the private sector compared to last year. Over 5.6 million people have lost their jobs since last June. The ranks of the unemployed are continuing to grow; the unemployment rate in June hit 9.5%. Good thing that unemployment insurance provides income to help tide these workers over this rough patch, right? Not so fast.

The share of unemployed workers receiving benefits has gradually shrunk since the 1970s. In 1975, over half of unemployed workers received regular benefits. But in 2008, only 37% of the unemployed did; in some states the figure was less than 25%. And so-called “discouraged workers,” those who want but are not actively seeking employment, are not considered part of the labor force and so are not even included in these figures.

Unemployment insurance, in short, is not a benefit that everyone who loses a job can count on. Several groups are working to change this. The American Recovery and Reinvestment Act (ARRA), better know as the Obama stimulus package, provides temporary funding for states that expand their unemployment coverage, and so far this year 25 states have done so. Others, however, are resisting even a temporary expansion of coverage that would be fully federally funded.

Why Unemployment Compensation?

When unemployment insurance was established as a nationwide program in 1935, it was hailed as a means of enabling workers to protect their standard of living between jobs. With it, workers are better able to keep their homes and their health. It helps to stabilize family well-being and maintain the labor force in a region. By enabling workers to engage in longer job searches, unemployment compensation also improves workers’ job choices. It even enhances employers’ flexibility in hiring by making lay-offs less painful. ...........(more)

The complete piece is at: http://www.dollarsandsense.org/archives/2009/0909hill.html

[Ruby the Liberal]

1. If not for UC, I would be in the street within the month.

[raccoon]

2. Over the years, it's become progressively harder to qualify for it.

Imagine that. :sarcasm:

[quiller4]

3. It isn't that qualifications have toughened. Some states have actually

liberized rules. What has changed is the number of self-employed who are outside the system. Independent contractors don't qualify and that counts a great many who operate small businesses that suffer in downturns.