Fact of the Week: Only One in Four
Unemployment Insurance Reaches Historically Low Share of Jobless
At the Witness Wednesday events held throughout this summer, in our emails, and here on our blog, we’ve continued to make the case for why Congress should renew unemployment insurance (UI) benefits for the long-term jobless that were allowed to expire last December. Now, new analysis released last week by the Economic Policy Institute shows that the share of jobless Americans currently receiving unemployment benefits has fallen to one of its lowest points in decades.
The percentage of unemployed who received benefits rose during the Great Recession and in the year that followed, as unemployment spiked and benefits were extended to help those who had been out of work longer than the duration of their benefits (typically 26 weeks; you can see the a state-by-state breakdown of the maximum duration of benefits for 2014 here, thanks to the Center on Budget and Policy Priorities). During the worst parts of this period, unemployment insurance benefits were extended for up to 99 weeks. At its peak reach, these benefits provided an income for roughly two-thirds of all unemployed workers. But as benefits were cut both at the state and federal levels and as unemployment for many dragged on for months and years after their benefits were exhausted, the share of jobless receiving benefits fell. By August 2014, only one of every four jobless Americans was receiving any unemployment insurance income, one of the lowest levels since 1987.
We know just how important UI benefits are. In the report on poverty CHN released on September 19, we noted the Census Bureau data that shows that unemployment insurance kept 1.2 million people out of poverty in 2013, and that UI expansions during the Great Recession prevented roughly 1.4 million foreclosures. At a time when two job seekers are competing for every open job, this critical safety net is not there for roughly 75 percent of our unemployed. The Fiscal Times noted that this means that our out-of-work neighbors “aren’t getting the sort of support from the government their fellow citizens received in the not-too-distant past.”
A new report from House Ways and Means Committee Ranking Member Sander Level (D-MI) shows that more than 3.6 million hardworking Americans have been cut off of emergency unemployment compensation since the program was allowed to expire last year. In addition to showing the number of jobless cut off from benefits in each state, the report also discusses the additional positive impacts UI had during the recession – improving consumer spending, job creation and labor force attachment. If you haven’t yet done so, please take a minute to urge Congress to extend unemployment benefits to help people pay their rent, utility bills and transportation costs while they continue to look for work.