Jobless Workers Receive Long-Awaited Government Relief

Yesterday, President Bush signed a war spending bill that includes a much-needed extension of unemployment benefits for millions of long-term unemployed Americans. This is welcome news for the 3.2 million jobless workers that the Congressional Budget Office had previously estimated would exhaust their regular unemployment benefits in 2008-09. The news is particularly welcome since the Department of Labor reported that May saw the largest increase in unemployment in over 20 years, from 5.0 percent in April to 5.5 percent in May.

The length of time that workers can collect regular unemployment varies by state, but most allow for up to 26 weeks of benefits. This new legislation will allow workers to continue receiving benefits for an additional 13 weeks after that initial period has expired. Jobless workers in every state can benefit as long as their qualifying period of employment was at least 20 weeks long.

Low-income job seekers who rely on unemployment insurance as a necessary safety net will be able to carry on feeding their families and paying their bills as they continue to look for work in an increasingly crowded job market. May’s unemployment figures indicated that the ranks of the newly unemployed rose by 760,000 people as the number of long-term unemployed similarly continued to grow to 1.6 million, up by 197,000 since the previous month. These extended benefit resources will also provide a valuable stimulus to the economy as the ranks of the unemployed are still able to contribute to the marketplace.

Despite the overwhelming positives of the legislation, many low-income families will still be left behind because they were never able to collect regular unemployment benefits in the first place. Antiquated rules often exclude workers who don’t reach certain earnings benchmarks, who have unstable employment, and who pursue part-time and temporary work. The net result is that 65 percent of unemployed workers are unable to collect benefits. Low-wage workers are particularly likely to be left out in the cold. They are 2.5 times more likely to be out of work, but about half as likely to receive benefits.

In “From Poverty to Prosperity: A Nationwide Strategy to Cut Poverty In Half,” the Center for American Progress provides an overview of the problems and offers some policy solutions, including:

• Pass the federal Unemployment Insurance Modernization Act, which would provide incentives for states to remove inappropriate, restrictive requirements.
• Extend eligibility for part-time workers through state-level policy changes.
• Basing eligibility on the number of hours worked as opposed to the amount of money earned through state-level policy changes.

Now that Congress has acted to extend the benefits for some, it must step up its efforts to address questions of basic access for a much greater share of the nation’s unemployed.

Joy Moses is a Policy Analyst with the Poverty & Prosperity program at American Progress.