Archive for Saturday, December 27, 2008

What safety net? Many jobless don’t get benefits

December 27, 2008


— On Dec. 19, when the Chrysler plant in Newark, Del., shut its doors, more than 1,000 autoworkers there suddenly joined the ranks of the unemployed.

At least they will be able to get unemployment insurance.

Most jobless workers can’t.

Across the United States, only 37 percent of workers who lose their jobs typically collect unemployment benefits, according to U.S. Labor Department statistics.

They often miss out because they didn’t earn enough while working, or their work history was not continuous enough to make them eligible under state unemployment laws — usually written in the pre-computer era when tracking payrolls was much slower.

At a time when the recession is a year old and the number of unemployed has risen to 10.3 million, there is a real question about where federal unemployment dollars should go.

Should they be sent directly to states’ strained employment trust funds, enabling states to keep from raising unemployment taxes on already beleaguered employers?

Or should they go to expanding eligibility, supporting states whose policies provide help to more people, who in turn will spend their benefits and boost the economy?

Last year, that approach became part of a federal bill — the Unemployment Insurance Modernization Act — passed in the House, but not the Senate, although then-Sen. Barack Obama was a sponsor.

“I think it’s a shock to people that the safety net is in such sad shape,” said Maurice Emsellem, co-policy director at the National Employment Law Project, a pro-worker organization advocating for the bill. “A lot of people fall through the cracks.”

Advocates like Emsellem always try to expand benefits in tough times, said Douglas J. Holmes, president of the National Foundation for Unemployment Compensation and Workers’ Compensation, a Washington business group.

It would be better to skip the debate and ship the money to the state trust funds quickly, he said. “Federal money is not designed to dictate benefits state by state.”

Those who fall through the cracks tend to be low-wage, part-time, seasonal or new workers — not like the 1,000 autoworkers laid off in Delaware.

“Although low-wage workers were almost 2 1/2 times as likely to be out of work as higher-wage workers, they were about half as likely to receive benefits,” said a U.S Government Accountability Office report written last year.

Unemployment insurance began in 1935, primarily as a safety net for people who had lost full-time jobs but expected to return to them.

These days, most people who are laid off don’t get called back. People change jobs frequently, cobble together part-time jobs, or work as independent contractors.

“Today, the work force is very different, and this is the heart of the matter,” said former U.S. Labor Secretary Robert Reich, a Clinton appointee.

That’s the macro-picture. The micro-view has to do with when eligibility kicks in — a technical issue with huge ramifications.

Most states give benefits based on minimum pay earned, minimum amounts of time worked and reasons the person is unemployed.

The relevant time period is known as the base year.

Current methods of calculating the base year date to pre-computer days when state unemployment agencies needed time to gather paper copies of payroll records.

So states didn’t look at recent records — those from the remaining weeks in the layoff quarter, or even the preceding quarter.

To calculate minimum salaries or time on the job, they didn’t count the weeks and months just before workers lost their jobs.

In most states that method persists, despite computerized pay systems.

As a result, many people with short or sporadic work histories don’t qualify. Recent college graduates may not receive unemployment benefits if they had started their jobs in June and were laid off this month.

That’s because none of their work weeks in this quarter starting Oct. 1, or in the previous quarter from July 1 to Sept. 31, would count in calculating their eligibility.


Godot 9 years, 5 months ago

Self employed contractors do not qualify for unemployment benefits, either, even if they have worked steadily for years, and even if they have had employees and have paid into the workers compensation system.

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