Time to Mend Unemployment Safety Net

Article excerpt

FOR decades, the unemployment insurance system successfully provided a vital safety net for jobless Americans. But in the 1980s, unemployment insurance (UI) became a sacrificial lamb at the altar of the Reagan budget cuts. The extended benefits program was gutted, benefits for veterans were reduced, and eligibility for benefits was dramatically restricted. The result is a safety net filled with holes.

With the economy in recession and the unemployment rate now at 7 percent, the weakness of UI as our first line of defense is starkly apparent. Only about two of five jobless workers receive benefits, long lines have formed at unemployment offices because states do not have enough money to pay administrative expenses, and few states have activated extended benefits programs despite the high jobless rate.

What about the human cost of a system that is not working as it was intended? At a recent hearing I chaired, we heard testimony from several unemployed individuals struggling to survive. Typical of the plight they face today was the story of a chambermaid in Philadelphia. At age 52, she found herself unemployed for the first time in her life when a new owner purchased the hotel where she worked and hired replacement workers. Her attempts to find another job were thwarted by long lines at the local employment office caused by staff cutbacks. The weekly unemployment compensation check was her only safety net, but was about to run out because the extended benefits program had not been activated in her state.

What can we do about holes in the unemployment safety net on which several million Americans rely?

First, we need to replace the federal-state extended benefits program which was created to provide additional benefits when the jobless rate is high. Under current law, the trigger for extended benefits is the insured unemployment rate. This reflects the number of individuals collecting regular unemployment benefits, not the actual number of jobless workers in a state. …