Last Chance! Modernizing Unemployment Insurance

By Libby Parker*

On February 11th, The National Employment Law Project (NELP) hosted a webinar on Taking Advantage of the Last Chance to Modernize Unemployment Insurance with Recovery Act Incentive Funds. Speakers included Gay Gilbert, the Administrator of the U.S. Department of Labor’s Office of Unemployment Insurance; Senator John L. Scott of South Carolina, whose state adopted the modernization reforms last year; and NELP Unemployment Insurance (UI) experts, George Wentworth and Maurice Emsellem. With the August 2011 cut off for Recovery Act incentive funds quickly approaching, all the speakers emphasized the need for the remaining 18 states not currently qualified for such funding to modernize their unemployment insurance systems.

In 2009, only 40% of unemployed workers collected state unemployment benefits. Furthermore, low-wage workers, who are twice as likely to be unemployed, are only one-third as likely to collect state unemployment benefits. Current gaps in state unemployment insurance laws serve to deny benefits to low-wage, women, and part-time workers. To address these gaps, the 2009 American Recovery and Reinvestment Act (ARRA) set aside $7 billion in incentive funds available to states to improve access to benefits for workers as part of a UI modernization program. Since ARRA’s adoption, states have claimed nearly two-thirds of the total incentive funding, expanding eligibility to an additional 200,000 jobless Americans. As Gay Gilbert described, the program is ‘win-win-win’, where states, workers, and employers all gain. Even with these improvements, 18 states have not taken advantage of this opportunity.

Of these 18, six states have received one-third of their incentive funds but need additional reforms to qualify for full funding. The remaining 12 don’t qualify for any of the incentive funds whatsoever. According to Maurice Emsellem at NELP, 10 of the 18 are currently receiving major federal loans going towards areas which may be covered under the program. For example, UI incentives could potentially cover 47% of Virginia’s existing federal loan spending. Because states only have until August to enact qualifying reforms to access the federal funds, now is the time to raise the profile of this issue. Senator Scott recommended that advocates and community organizers discern which state bodies are responsible for adopting relevant reform, provide accessible information to relevant decision makers, and organization a taskforce of individuals to sponsor such action within state government.

For more information on the impact of modernizing unemployment insurance on women, check out this fact sheet from the National Women's Law Center. 

* Libby Parker is a Research and Programs Intern with the National Council for Research on Women. She graduated with an M.A. Honours in International Relations from the University of St. Andrews, Scotland.

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