New report sproposes critical policy reforms to unemployment insurance

 

National day of action being held in Washington, D.C. and six other cities

As 26 states cut pandemic unemployment benefits prematurely, a new report from a coalition of advocacy groups and think tanks, in partnership with workers who have experienced unemployment during COVID-19, proposes a stronger federal role in the unemployment insurance (UI) system and a slate of permanent reforms to unemployment benefits that will sustain families and the economy.

The report is a joint project of Center for American Progress, Center for Popular Democracy, Economic Policy Institute, Groundwork Collaborative, National Employment Law Project, National Women’s Law Center, and Washington Center for Equitable Growth.

“A successful unemployment system can be the centerpiece of economic recovery, particularly for those communities, such as workers of color, who bear the brunt of downturns and are left behind in the wake of recessions,” said Heidi Shierholz, Director of Policy and Senior Economist at the Economic Policy Institute, and contributor to the report. “In addition to sustaining working families through jobless spells, swift and adequate unemployment benefits are good for the broader economy because they allow workers to search for a job that is a good match to their needs, instead of being so desperate that they have to take the first job that comes along no matter how bad it is for them.”

The report includes key insights from workers who experienced unemployment during the pandemic, including Sharon Shelton Corpening, a media gig worker in Georgia who has supported herself and her mother on Pandemic Unemployment Assistance.

“COVID unemployed workers like me are fighting to build a UI system that supports us until we can find good jobs that allow us to live in dignity and security. Next week, my financial lifeline will be yanked from under me because states like Georgia have too much power to reduce, restrict, or flat out deny benefits that are literally keeping us alive,” said Corpening, an Unemployed Action leader. “Unemployed people—especially Black people in the South who face systemic racism even as jobs return—want and need to work. But this current unstable unemployment insurance system hasn’t helped us get on our feet if we can’t even count on UI benefits. We need federal protections and we need them now.”

The report’s proposed structural changes include:

• Guaranteeing universal minimum standards for benefits eligibility, duration, and levels, with states free to enact more expansive benefits;
• Reforming financing of UI to eliminate incentives for states and employers to exclude workers and reduce benefits;
• Updating UI eligibility to match the modern workforce and guarantee benefits to everyone looking for work but still jobless through no fault of their own;
• Expanding UI benefit duration to provide longer protection during normal times and use effective measures of economic conditions to automatically extend and sustain benefits during downturns; and
• Increasing UI benefits to levels working families can survive on.

“This report lays out the first steps toward transforming our unemployment insurance system, with racial equity concerns front and center. Black, Brown, and Indigenous workers in particular have borne the brunt of the pandemic and its unemployment crisis. They continue to grapple every day with workplace health and safety concerns, underpaid work, eroded transportation infrastructure, and lack of affordable child care options. The urgently needed unemployment reforms detailed in our report will be a win for everyone in our nation,” said Rebecca Dixon, Executive Director at the National Employment Law Project.

The report release coincides with a national day of action from the Center for Popular Democracy calling on Congress to act quickly and boldly to enact transformative changes for an equitable economy, including overhauling the UI system. Unemployed Action leaders from around the country will join excluded immigrant workers and others in Washington, D.C. for a 5,000-person march to the U.S. Capitol. Workers will also rally in Las Vegas, Los Angeles, Atlanta, New Orleans, Austin, and Pittsfield MA.

As the report explains, when state UI structures became overwhelmed during the onset of the COVID-19 recession, federal policymakers realized that benefit levels were too low and not available to enough workers. In part to offer stimulus to a sharply contracting economy, the federal government provided unemployed workers claiming standard UI benefits with a supplemental $600 per week in additional benefits, as well as extended the duration of benefits and provided benefits to some groups of workers left out of the regular UI system, such as the self-employed and temporary workers.

But even those emergency programs have proven inadequate, with already overstretched state systems failing to get out emergency benefits in a timely manner. Half of the states are now choosing to cut off their residents’ access to these programs early, causing extraordinary harm to vulnerable families and impeding the economic recovery. These attacks on critical emergency benefits are the most vivid and recent manifestation of recurring dysfunction in the UI system: The federal government has ceded so much control to states that it has failed to equitably protect working people.

“Unemployment benefits are critical to keep us going as we continue to look for work, but our broken system keeps throwing obstacles in our paths,” said Nate Claus, an Unemployed Action leader and theater worker in New York. “Federal protections are desperately needed to strengthen unemployment insurance.”