Reports from the Economic Front

by Martin Hart-Landsberg

The Disappearing State Unemployment System

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Business has failed to create the jobs we need and our public policies are failing to protect those who are unemployed.

As an Economic Policy Institute report explains:

The drop in the official unemployment rate overstates the overall improvements made in the underlying labor market. The United States lost 7.8 million jobs between December 2007 and October 2010 but the working-age population continued to grow over that period. As a result, even with steady job growth in recent years, the current labor market is still short 5.6 million jobs needed to keep up with the growth in potential labor force (see Figure A).

 Jobs

And, as of December 2014, only 23.1 percent of unemployed workers received any state unemployment benefits (see Figure B).  One reason is the nature of many of the recently created jobs: they are short term and low paying; this leaves workers without the work record or earnings necessary to draw benefits.  Another reason:

since 2011 nine states have cut the maximum available number of weeks of regular UI benefit duration [to below the long-accepted norm of 26 weeks] : Arkansas, Florida, Georgia, Illinois, Kansas, Michigan, Missouri, North Carolina, and South Carolina. Except Illinois, all these states made other legislative changes to their programs which may have reduced benefit recipiency.

 Unemployment

Times are not easy even for those lucky enough to receive the benefits they earned:  As the Economic Policy Institute report notes:

Many states pay low benefits. There were 11 states with maximum weekly benefit levels of $350 or less in 2014, meaning that workers earning more than $700 a week (well below the median weekly earnings) do not get half their pre-layoff wages replaced by UI benefits. Average benefits overall were only $315 a week in 2014 with average weekly benefits below poverty levels in the poorly performing states.

Written by marty

April 13th, 2015 at 4:37 am

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