Turning Hard Times to Good: Unemployment Insurance Reform

1
Turning Hard Times to Good Unemployment
Insurance Reform

• Andrew Stettner
• Deputy Director
• National Employment Law Project
• www.nelp.org
• December 9, 2008

2
The Importance of Unemployment Insurance in
Todays Economy

• Economic Situation 1.2 million jobs lost this
  year, and 2.8 million more unemployed people than
  a year ago. 2.26 have been unemployed for more
  than six months, up from 1.3 million a year ago.
• Economic Stimulus UI effectively replaces lost
  consumer spending. Economy.com (January 2008)
  founded a 1.64 per dollar multiplier effect for
  UI compared to 1.02-1.29 for tax cuts.
• Poverty Reduction UI cuts family poverty among
  UI recipients in half.

3
Changing Workforce Struggle to Access the UI
Safety Net

• Low-wage workers Low-wage workers twice as
  likely to be unemployed as high wage workers
• Low-Wage workers only 1/3rd as likely as higher
  wage workers to receive UI benefits when they are
  laid off.
• Part-time workers 1 in 6 U.S. employees work a
  part-time schedule.
• Only 28 of jobless part-time workers collect UI
  benefits, compared to 50 of jobless full-time
  workers.
• Women workers In 2007, 69 of married and 77 of
  unmarried mothers were in the labor force.
• In 41 states, unemployed men are more likely than
  unemployed women to receive UI benefits.

4
Major Holes in State UI Safety Nets
State UI Recipiency Rates, 2nd Quarter 2008
Less than 33 SD, TX, CO, OK, DC, MS, UT, VA,
GA, LA, TN, AZ, ND, KS, KY, MO, WY, ME, NH, OH,
FL, NE
Between 34 and 40 SC, WA, AL, WV, NM, IL, MD,
NC, CA, IN, MI, MN, NY
Between 41 and 50 IA, NV, HI, AR, RI, CT, AK,
MT, OR, VT
Above 50 WI, DE, MA, NJ, PA, ID
5
Families struggle to get by on meager jobless
benefits
Average Weekly Unemployment Benefit 2nd Quarter
2008
6
Role for EARN Groups

• Quality data on state programs available on a
  timely basis from US DOL.
• Key form of worker protection always, and in the
  spotlight now.
• EARN groups involved/recently involved in New
  York, New Jersey, Ohio, Indiana, Minnesota, North
  Carolina, Texas, New Mexico, Oregon, Mississippi.
• Hear from Joy at OCPP about how theyve been
  involved.

7
Major Shift Toward State Reforms Filling the
Gaps in the UI Program

• Since 1996, a trend has emerged with more than
  half the states filling the gaps in the UI
  program to benefit low-wage, part-time and women
  workers.
• State Reform Highlights
• 13 new states (21 total) passed legislation which
  counts a workers recent earnings to qualify for
  benefits (alternative base period).
• 8 new states (24 total) allow workers to collect
  unemployment while seeking part-time (not just
  full-time) work.
• 29 states have adopted coverage for workers who
  leave their jobs due to domestic violence and
  other family friendly reforms.

8
UI Modernization Act Federal Help in Closing UI
System Gaps

• Provides 7 billion in Reed Act funds Targeted
  to states that qualify for incentive payments to
  modernize their UI programs.
• Helps 500,000 workers per year targeting the
  long-term unemployed and the gaps that deny UI to
  low-wage, part-time and women workers.
• -One-third share requires alternative base
  period.
• -Remaining two-thirds share requires two of the
  following Part-time provision, family-friendly
  voluntary quit provisions, extra UI for workers
  in training (Senate bill also includes dependent
  allowances and 26-week uniform duration of state
  benefits).
• Rewards States 19 states immediately qualify for
  1.4 to 1.5 billion, plus 18 more states would
  qualify for at least three to four years of ABP
  benefits if they enact the reform.
• Additional Administrative Help UIMA also
  provides all states with a portion of a 500
  million extra administrative grant to help with
  the crush of additional regular and extended
  benefit claims.

9
Alternative Base Period

• Alternative Base Period Shift helps 40 of those
  denied under SBP qualify under the ABP.
• Increases low-wage worker recipiency by as much
  as 17 (2-5 of all claims).

10
Alternative Base Period Expands to 21
StatesCovering Half the Nations UI Claims
ABP Enacted (20 States DC)
ABP Not Enacted (30 states)
11
Families Seeking Part-Time Work Qualify for UI in
Nearly Half the States
UI Law for Part-time Workers
Equity (9 states)
Favorable (14 States and DC)
Unfavorable (27 states)
12
UI for workers who leave a job due to compelling
family circumstances

• UI Modernization Act supports reforms that make
  compelling family circumstances count as a good
  cause reason to leave work under UI law.
• Leaving a job because of domestic violence. (29
  states)
• Leaving work to follow a spouse who is
  transferred to a new location. (15 states)
• Leaving work to care for an ill child or family
  member. (16 states)
• Different than family leave Workers must be
  available for work.

13
Federal Extended Benefits

• Victory! 20-33 weeks of federal extended benefits
  available to workers exhausting state UI benefits
  through March 2009. (HR 6867).
• 20 weeks in all states, adding 7 weeks to first
  extension
• An extra 13 weeks in high unemployment states (6
  unemployment and above)
• Next steps
• Extending the program past March 2009.
• Making sure states do a much better job enrolling
  people.

14
Helping Families Survive the Recession

• Benefit Increases Alaska increased the maximum
  UI benefits from 248 to 370. Louisiana and
  Mississippi both made 20 or more increase in
  maximum weekly benefit. NY made major progress.
  Indexing is the key.
• Raising the Benefit for Lower Wage Workers Full
  time 8 worker gets 198 a week in Hawaii versus
  160 a week in Mississippi.
• Improving partial benefits Supplements the
  income of the underemployed.
• Increasing the duration of unemployment benefits
  Only 9 states provide 26 weeks of UI to all
  claimants. New Jersey lengthened benefits in 2003
  to respond to tough times.
• Watch Out For Freezes or cuts in the states
  maximum weekly benefit amount, or reductions in
  benefits to workers qualifying for less than the
  maxim. Business want to have their cake and eat
  it to.

15
NELPs UI Project

• NELP is available and willing to help you with UI
  legislation or analysis.
• Contact astettner_at_nelp.org or 212-285-3025 x 303