Unemployment Insurance (UI)

  • Created in 1935 as a response to the massive job losses of the Great Depression, the Unemployment Insurance (UI) system provides temporary income support to laid off workers. During economic downturns, UI prevents further layoffs by enabling unemployed workers to contribute to their local economies through the purchase of needed goods and services. The UI program is overseen by the Department of Labor, with benefits being paid for by the states. The federal government covers the cost of administration of the program.

    Unfortunately, the UI system – set up for a long-gone labor market of full-time male workers – is ill-equipped to handle a primarily service economy. As a result, many low-wage, women, and part-time workers do not meet UI eligibility requirements. In fact, the system did not cover more than 60 percent of the people who lost their jobs in America’s recent economic slowdown.

    The basic state unemployment insurance program provides benefits for 26 weeks. The Temporary Extended Unemployment Compensation Program (TEUC) is a federal program of benefits that provided additional support of up to 26 additional weeks after the state benefits have been exhausted. It was enacted in March 2002 in order to provide additional economic stimulus due to the recession.

    There are many concerns about the unemployment insurance system in its present form, not only concerning the effectiveness of such small amounts of assistance during unemployment of the program, but its long-term solvency as well.

    For more information on this issue, visit CHN’s Public Policy Priorities, 2013-2014.

    Advocacy Organizations

    Economic Policy Institute
    National Employment Law Project
    Unemployeed Workers Information Website