Workers counting on their states’ unemployment insurance system to provide an income safety net if they lose a job are in for a rude awakening. That help depends on where they live and a new report gives the unemployment systems in 23 states an “F” and calls for major reforms.
Failing the Unemployed: A State-by-State Examination of Unemployment Insurance Systems looks at five key areas that determine if working families can count on help: eligibility standards; benefit levels; revenue; trust fund adequacy; and recession preparedness. The study was conducted by the Economic Policy Institute, the Center on Budget and Policy Priorities and the National Employment Law Project.
Based on a pass/fail grading system with passing grades needed in only three of the five categories to earn an overall passing grade, 23 states’ systems flunked. In the area of eligibility, 48 out of the 50 states and the District of Columbia failed.
“Unemployment benefits are not charity. Unemployment insurance premiums are paid for every employee in this country, and just like medical or car insurance pays for an illness or accident, unemployment benefits are designed to support working families when a worker loses his or her job. But this crucial system fails more often than it works,” said AFL-CIO President John Sweeney at a March 12 press conference announcing the report’s findings.
Only 40 percent of workers actually receive benefits when they lose their jobs and badly structured eligibility requirements often deny benefits to workers who are likely to need them most—low-wage and part-time workers—the report says.
Some states automatically disqualify part-time workers, others set up earning requirements that are difficult to meet and many states do not count recent earnings but go back a quarter or more to calculate if workers meet the earnings threshold to receive benefits.
Anthony Walker, who was laid off from his Silver Spring, Md., parking garage job in January, fell victim to Maryland’s eligibility shortcomings.
“Most people expect something. When I got laid off everybody said, ‘Don’t forget to file…at least you’ll get some unemployment.’ I feel like I’m losing something. I mean, I didn’t quit, I wasn’t fired. You should be able to get your benefits,” Walker told the press conference.
When workers do receive benefits, the report notes that in eight states even the maximum weekly benefit is too low to keep a family out of poverty and in six more states maximum benefits put a family of three just $10 per week above the poverty line.
The report’s recommendations include expanding benefit eligibility to include more low-wage and part-time workers, increasing benefit levels to provide a stronger safety net and ensuring state’s unemployment insurance tax polices—which in recent years have lowered employer obligations—are more balanced so unemployment insurance trust funds are adequately funded and more unemployed workers are able to collect unemployment benefits.
Who Got F’s?
The unemployment insurance systems in these states flunked the test for working families. Read why.
Alabama | Arizona | Arkansas | California | Colorado | Connecticut | Delaware | Florida | Georgia | Illinois | Indiana | Louisiana | Maryland | Minnesota | Mississippi | Missouri | Nebraska | New Mexico | North Carolina | North Dakota | South Carolina | Tennessee | Texas | Virginia |
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