CPA News Releases, Advisories, and Editorials

Talk of homeland security means little to Americans with no economic security due to the dire shape of our unemployment system. Imagine being a single mom, working part-time to support your family, struggling day-to-day to make ends meet. Now imagine that you were recently laid off, by no fault of your own, and because of your part-time status, you don’t qualify for unemployment benefits. This is no imaginary situation for hundreds of thousands of Americans today.

From November 2000 to November 2001, the number of unemployed Americans soared from 5.7 million to 8.2 million, the largest one-year increase since 1982. Long-term unemployment is also increasing significantly. From October to November 2001, the number of workers unemployed for more than 27 weeks increased by 32 percent, the largest one-month increase since such data collection began in 1948, according to the Center on Budget and Policy Priorities.

It’s hard not to think of these people as abstract statistics. That is, until the recession puts your family at risk. Every month, thousands of unemployed workers end up choosing between paying their mortgage or buying food and medicine. We must move forward and find solutions to keep our families safe and get our economy moving again. Moving forward demands us to take a closer look at the system in place to support the recently unemployed. Unfortunately, just at a time when we need unemployment insurance to work for Americans, we have to accept realityﾗthe current system is tattered.

Reforming unemployment honors the spirit of its intent. Unemployment insurance was intended to be our nationﾒs first line of defense in an economic downturn by insuring workers with temporary, partial wage replacement in the event of a lay-off. It was also intended to insure the economy, by minimizing the effects of recession and decreasing unemployment.

Though workers currently earn this insurance, the system has been neglected and cut back. Today, most laid-off workers donﾒt qualify for any unemployment benefits. The unemployment insurance systemﾗfirst created in 1935 on a depression-era model of factory employmentﾗhas not kept pace with decades of change in the labor market. Today’s workforce includes far more seasonal, part-time, single-parents and temporary workers. Many of these workers have significant attachment to the labor force, but are not eligible for unemployment compensation because of rules that were put in place with full-time male breadwinners in mind. As a result, far less than half of all unemployed workers (39%) collected benefits in 2000, and even fewer low-wage workers received any benefits.

The good news is that states don’t need to wait for Congress to take action. In fact, right now more than half the states are actively considering measures to strengthen unemployment insurance. It promises to be one of the most important and hotly contested issues in both legislative sessions and elections this year. States can shore up unemployment insurance immediately by broadening coverage and increasing benefits.

Despite pressure on state general funds, most states are in a position to fix their unemployment safety nets. State benefits are financed not through general funds, but through state payroll taxes and paid from state trust fund accounts maintained in the U.S. Treasury. A number of states have accumulated ample unemployment insurance trust funds by operating programs that pay below-average benefits to a lower than average proportion of their unemployed workers. Other states have lowered payroll taxes so much that in 2000 they reached their lowest levels in the programﾒs history.

Improving unemployment should be a priority equivalent to fighting terrorism around the world. Reforming unemployment makes the investments we need that will put people back to work. Now more than ever, states must implement positive reforms to protect unemployed workers today, and provide a stronger safety net for tomorrow.

The Center for Policy Alternatives is the nation’s leading nonpartisan progressive public policy and leadership development center serving state legislators, state policy organizations and state grassroots leaders. For more information about CPA’s leadership and policy programs, refer to www.stateaction.org.