Education: A Golden Age

“The education sector’s structure and policies will change more in the next 3 years than they changed in the last 2,500 years”

Robert Reich on the need for an unemployment insurance guidelines overhaul

Tuesday, July 08, 2008
Why Most Who Lose Their Jobs Don’t Get Unemployment Benefits

The great American jobs machine is grinding to a halt. In response, Congress has just extended unemployment benefits 13 additional weeks, over and above the 26 weeks normally provided. That’s good as far as it goes.

But most people who lose their job these days don’t qualify for any unemployment benefits at all.

How can this be? Simple. In order to be eligible, most states require you to have been working in the job you lost full time, and for a certain number of years.

These requirements made sense decades ago when labor markets were far more stable – when most working people stayed in the same full-time job for years, and only lost it temporarily during the downdraft of a recession, picking it up again when the economy rebounded. And back then, one full-time breadwinner could keep a family whole. In those days, unemployment insurance counter-balanced recessions by keeping money in the pockets of working families.

But nothing is stable about today’s labor market. Every time the economy sinks, employers fire workers permanently. Even when the economy is doing fine, pink slips proliferate — although under these circumstances it’s easier to find a new job. All of which means a growing fraction of the labor force is in a job only a few years.

Meanwhile, full-time jobs are vanishing. More companies are contracting out their work. As a result, more people are doing several part-time jobs, or are self employed. They’re also more likely to be part of a couple whose family depends on two sets of paychecks.

So when times get tough, as they are now — and people lose a job after having it for only a few years or lose their part-time job or lose their client, or one member of a couple loses earnings — a family can be in real trouble. And there are no unemployment benefits, not even partial benefits based on the proportional loss of income from a part-time job, to help them. Or to help counter-balance the economy as a whole.

It’s a disgrace that most Americans who lose their jobs don’t qualify for unemployment insurance. It’s also bad for the economy because unemployment insurance is less effective as a counter-cyclical device. Congress should expand coverage (condition federal UI funding of states) so a majority of American families have some security in these perilous times.

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2008/07/8 - Posted by | Policy

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