Fact of the Week: Share of Jobless Workers Receiving Unemployment Insurance at Record Low
“There are a lot of people truly hurting… This isn’t just affecting individuals, but families, too…. You go from providing for yourself and your family and then, through no fault of your own, you can’t anymore. You send in application after application after application and sometimes you hear back but sometimes you don’t… We can’t sustain this…” – Elnora, Washington, DC
When I interviewed Elnora last July, she had been unemployed for about a year. Her unemployment insurance (UI) benefits had run out six months before, and since Congress failed to renew federal emergency unemployment compensation at the end of 2013, she was reliant on her son’s assistance to stay afloat. She could not count on unemployment insurance to help – and she was far from alone in that category.
According to a new report from the National Employment Law Project, only about one in four unemployed workers (27 percent) received UI benefits in 2014, the lowest level ever. The Job Ahead: Advancing Opportunity for Unemployed Workers notes that 37 percent of the jobless were receiving aid in 2007, right before the Great Recession. That level rose to nearly 70 percent in 2010 because of federal extended benefits. However, with those extended benefits gone, cuts to state programs, outdated eligibility rules that keep part-time workers and those who have to quit a job for compelling personal reasons excluded, and the number of months people experience unemployment growing, the share of jobless workers helped by unemployment insurance plummeted. And the low-income unemployed are the most affected, since they are least likely to have additional resources to fall back on.
The report includes recommendations for states and federal lawmakers to both help workers now and to better prepare for future recessions, including policies surrounding preventing long-term unemployment, expanding UI access for lower-wage workers, increasing help for the long-term unemployed, and shoring up UI infrastructure.
Some of NELP’s recommendations are similar to those noted in President Obama’s FY 2016 budget request. As we noted in our recent special edition of the Human Needs Report focusing on the President’s budget, he seeks to modernize UI by improving the efficiency of state programs and encouraging states to implement programs that promote reemployment and reach more workers. There would be $5 billion in federal incentive funds for states that take a number of steps to make eligibility for UI fairer. It would also make the program more responsive in hard times by proposing a permanent Extended Benefits program that would kick in when states experience a sharp rise in unemployment, without needing Congress to approve the extended benefits.
The President’s budget also includes important incentives for states to halt the considerable reduction in benefits which has occurred since the recession. In one improvement, the Extended Benefits program would be financed entirely by the federal government in states that provide at least 26 weeks of regular UI benefits, but only half of the extended benefits will be federally funded in states that have made their regular programs shorter than 26 weeks (according to NELP, eight states currently have maximum durations of benefits below 26 weeks. Florida and North Carolina can pay as few as 12 weeks based on the state’s unemployment rate).
While 2014 was the strongest year of post-recession job gains since Great Recession, 9 million Americans are still counted as unemployed. Of those, 2.8 million have been out of work for more than 26 weeks. This doesn’t include the millions of involuntary part-time workers or those who have dropped out of the labor force altogether because they no longer believe there’s a job out there for them. Thankfully, Elnora did eventually find a job and is now working full time. But for the millions of Americans who are still unemployed or underemployed and without UI benefits, the struggle to stay continues.