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Staggering Job Losses Highlight Need For Improvements to Unemployment Insurance
House Legislation would modernize UI system
WASHINGTON, D.C. -- The Bureau of Labor Statistics announced today that the U.S. economy lost 533,000 jobs last month, the largest one-month loss since 1974. Ways and Means Committee Chairman Charles B. Rangel (D-NY) and Income Security and Family Support Subcommittee Chairman McDermott (D-WA) responded by calling for the swift passage of the Unemployment Insurance Modernization Act (HR 2233). This legislation would provide up to $7 billion for States to improve unemployment insurance coverage for many jobless workers who are now denied those benefits.
“Whether you care about fairness for workers or about stimulating the economy, ensuring that workers who lose their jobs through no fault of their own have access to unemployment benefits is the right thing to do,” said Chairman Rangel. “We recently extended unemployment benefits, and now we need to take the next step to help States improve the program.”
"For months we have been applying tourniquets by extending unemployment insurance benefits,” said Income Security and Family Support Subcommittee Chairman McDermott. “While important in the short run because of the immediate positive economic impact to the economy and the modest assistance UI benefits provide struggling Americans, we know the UI system itself is not up to the challenges of a 21st Century economy and modernizing it will be one of my top priorities in the new Congress.”
The Ways and Means leaders also believe that the growing number of underemployed Americans, which has now topped a staggering 13%, provides further evidence of the urgency to act as soon as possible.
The Unemployment Insurance Modernization Act (HR 2233) would provide funds to help States enact specific reforms to improve unemployment insurance coverage among low-wage, part-time and other workers who now have trouble accessing benefits when they lose their jobs. For example, the Government Accountability Office (GAO) has found that low-wage workers are only one-third as likely to receive unemployment benefits as higher wage workers even though they are more likely to become unemployed. It has been projected that if States came into compliance with this legislation, an additional 500,000 unemployed workers would be able to collect jobless benefits. Economists consistently find that unemployment benefits are one of the most effective forms of stimulus.
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