Thanks to cutbacks in nine states in the past three years and an end to federal extensions of the program in 2013, the percentage of out-of-work Americans receiving compensation from unemployment insurance is at its lowest level since the 1970s. According to a new study by Will Kimball and Rick McHugh at the Economic Policy Institute:
By December 2014, only 23 out of every 100 jobless workers were getting state UI benefits. Because there were federal benefit extensions in place in 1983 and 1984, this means that those exhausting UI benefits in 2014 had less protection from income loss than any cohort of jobless individuals exhausting state UI benefits for several decades. [...]
Compared with previous recessions, the U.S. labor market in 2014 is at a point in the recovery when we would expect benefit recipiency rates to fall from their peak levels. What stands out about the current low recipiency levels is the degree of their decline and the extremely low levels to which some individual states’ recipiency rates have fallen.
As the EPI authors note, this is a troubling development.
Though modest compared with programs in some other nations, the 80-year-old unemployment insurance program—initiated by the Social Security Act of 1935—is one of the most important reforms of the New Deal. The rationale for it is simple enough: It provides temporary income to help out-of-work Americans keep a roof over their heads and the electricity on until they can find another job; and, by providing cash to people who will spend it quickly out of necessity, it bolsters the economy in times of recession to help keep matters from getting worse.
The chart above shows percentages only for state compensation. Until recently, all the states provided 26 weeks of compensation to eligible jobless people. Since the 1950s, Congress has passed extensions during every recession and their aftermath. As the situation worsened during the Great Recession, the jobless in the worst-hit states could collect up to 63 additional weeks of compensation—a total of 99 weeks.
The Treasury paid for these extensions. Combined, the state and federal programs covered 65 percent of the unemployed workforce in 2010.
There's more below the fold.
But, in late 2010, with millions of Americans continuing to be counted among the long-term unemployed—out of work 27 weeks or more—Republicans in Congress started arguing against renewing the federal extensions. A number of these so-called leaders, implicitly or explicitly, said the program made the jobless lazy and uninterested in finding jobs. This sneer was issued despite the fact that there were far too few jobs available.
As the official unemployment rate fell—in part because so many people left the workforce—Republican opposition grew and cutbacks were made in the federal extensions until, in December 2013, they were ended altogether. At the same time nine states cut the amount of each week's compensation or cut the number of eligibility weeks from 26 to something lower. Or both. The states are Arkansas, Florida, Georgia, Illinois, Kansas, Michigan, Missouri, North Carolina, and South Carolina. At the end of 2014, South Carolina was on the bottom rung of unemployed people receiving compensation: just 14.8 percent.
As of the week ending Feb. 21, the Department of Labor reported that 2.9 million Americans were claiming unemployment compensation. If 65 percent of unemployed Americans were still receiving compensation, as was the case five years ago, that figure would be more than 5 million. (That doesn't include those no longer counted in the workforce because they have given up looking for a job.)
While valuable tweaks have been recommended for changing the unemployment insurance program, the most important element of a modernization first proposed in 2009 would mandate that every state provide 26 weeks of compensation, the standard for half a century until right-wing dismantlers decided to make life even tougher for those who have lost their jobs through no fault of their own.
Even though the average weekly unemployment insurance check of $315 in 2014 didn't provide enough money to keep a family of three above the federal poverty line, the program nevertheless is a lifeline. Cutting it off prematurely doesn't just hurt the individuals and families affected, it hurts the overall economy, too.
More and better jobs are the ultimate cure for this situation. But the same leaders who axed the federal unemployment compensation extensions have shown an obstinate unwillingness to pass a serious jobs program. The suffering engendered by this makes no never mind to them. The solution to that is putting those alleged representatives of the people out of their cushy jobs and into the unemployment line.
