Unemployment benefits the essentials

Unemployment
Insurance (UI) Benefits:
The Essentials
UnemployedWorkers.org

Resource Guide for the Unemployed


“No country, however rich, can afford
the waste of its human resources.
Demoralization caused by vast
unemployment is our greatest
extravagance. Morally, it is the
greatest menace to our social order.”
Franklin Delano Roosevelt


“I do not believe we can repair the
basic fabric of society until people
who are willing to work have work.
Work organizes life. It gives structure
and discipline to life.”
Bill Clinton


Who gets benefits?


Who gets benefits?

• Those who lost jobs through no fault of
their own:
• Worker lost most recent job due to
circumstances beyond his or her
control; AND
• Must have earned a minimum
amount set by each state in a
specified 12-month period (roughly)
during the 18 months before job
loss.


Who gets benefits?

• Not Eligible:
• Most full-time students
• Most farm labor
• Freelancers & contractors
• Undocumented immigrants
• Workers at religious institutions
• New entrants into the labor force


Who gets benefits?

• The UI program became less effective
over time as the workforce changed


Extended Unemployment
Benefits:
Boosting the entire economy



• When times are tough, governments
boost spending to stimulate the
economy. Cash to the unemployed is
an excellent method of helping the
economy and helping everyone, in
comparison to tax cuts.



• The Congressional Budget Office
recently estimated that UI benefits can
lead to as much as $1.90 in economic
activity, as compared to a general
reduction in income taxes, which leads
to $0.40 in economic activity.



• Recipients of tax cuts save some of
the increase while UI recipients
spend their whole check. The money
multiplies as a UI recipient spends a
dollar at a grocery store, who pays
his cashiers, stockers and baggers,
who then spend their wages at local
restaurants etc.
• Historically, there has been bipartisan
support for a a strong UI safety net.

How is Unemployment
Funded?


How is unemployment funded?

• Regular unemployment benefits are
paid for by payroll taxes.
• Point: We earn it. It’s not a
“giveaway.”



• The average worker has $275 per year
deposited on his or her behalf into the
state unemployment trust fund. This
money is used exclusively for
unemployment benefits.



• This is money that employers look at in
the bottom line of how much each
employee costs.
• So it is money that is part of your
“compensation” even if you never
see it until you lose your job – in
other words, this isn’t a handout or
welfare – it’s something you’ve
EARNED.



• Employers pay a tax to the state
trust fund. This is the money the
states use to pay benefits

• Your payment is based on an
“experience rating” – meaning that
employers who have more frequent
turnover in workers pay more per
worker than those who don’t have a
lot of turnover.



• The government wants to reward
employers who don’t “churn”
employees, but this structure also
gives employers an incentive to
challenge your claim.


Who is eligible?
and
How are benefits
determined?


Who is eligible?

• Lost job thru circumstances beyond
your control
• Laid off because of lack of work, plant
closing, reduction in force, etc.
• Fired but not for misconduct (breaking
a company rule or policy)


Who is eligible?

• Quit with for a compelling reason (good
cause)
• Good cause includes something an
employer did that caused you to quit
(sexual harassment; change in the
conditions of work) and depending
on the state some urgent personal
and family needs (domestic violence,
illness and quitting to follow a
spouse moving for a job.)


Who is eligible?

• Had sufficient earnings during the
“base period” to establish that you are
sufficiently connected to the workforce.
• Minimum earnings (varies by state)
must be earned in the 4 of the last 5
completed quarters (12 of the last 18
months), or in some states the last 4
completed quarters.


How are benefits determined?

• Recipients must continue to be able
and available to work and actively
looking for work.
• UI designed to be a program to
transition people to a new job. It is
NOT meant for people who decide to
NOT work.


What changes during a
recession?


What changes during a recession?

• When the unemployment rate goes up,
increasing numbers of workers cannot
find jobs within the 6 months normally
provided by the states, benefits are
extended.
• Extended benefits are a federal
responsibility.



• Nationwide extensions are provided
through temporary programs enacted
by Congress in each recent in recent
downturns as long as the
unemployment rate has been over
6.5%.
• The length of extended benefits are
based on the unemployment rate in
yo u r s t a t e a n d o n i n t e ra c t i o n s
between state and federal law.



Emergency
State Extended
Unemployment
Benefits Benefits
Compensation

Tier I Tier II Tier III Tier IV EB* HEB*

Duration of
Benefits in 26 20 14 13 6 13 7
Weeks

State
Unemployment Over Over Over Over
All All All
Rate Needed to 6% 8.5% 6.5% 8%
Qualify

# of States 50 50 50 47 26 35 32
* only in States with conforming laws

What do the unemployed
want or need?


What do the unemployed want or need?

• A new job
• Help accessing and keeping benefits
• Information about the social safety net
• Access to retraining
• Participation in organizing efforts
• Help addressing social and emotional
issues


Role of
National Employment
Law Project
(NELP)


Role of NELP

•NELP is the national policy
organization that has advocated for
40 years for unemployed workers
and economic opportunity for all.
• Leading the charge for extensions in
unemployment benefits during times
of high unemployment.
•Supporting changes in state
unemployment laws so that they
protect more people under more
circumstances.

Role of


Role of UnemployedWorkers.org

• Our online community of jobless
workers looking for information on
accessing benefits.
• Ta k i n g a c t i o n f o r e x t e n d e d
unemployment benefits during the
recession.
• Encouraging grassroots organizing
efforts by the unemployed, for the
unemployed.


NELP
and
Work to Extend UI Benefits
During the Recession


NELP & UnemployedWorkers.org
Work to Extend UI Benefits During the Recession

• Together, NELP and UW work to help
America’s unemployed receive benefits.
• 5.1 million workers now receiving
these benefits, but millions will be
cut off prematurely if Congress does
not continue programs past the
current November 30th deadline.



• Wo r ke r s r e c e i v i n g r e g u l a r s t a t e
benefits on November 30th, will not be
able to qualify for any extension.
• Workers receiving federal extended
benefits (EB) in all but 10 states (AK,
CT, KS, MN, NJ, NM, NC, OR, RI, WA)
will receive their last check during the
week of November 30th.



• Workers on Emergency Unemployment
Compensation (weeks 27-79) will be
able to receive a few more extra weeks
but will not qualify for the full package
(known as additional tiers) of benefits.
• NELP is also fighting to create jobs for
the unemployed through government
subsidies, and to make sure that the
recovery is built on quality family-
supporting jobs.



• NELP is also fighting to create jobs
for the unemployed through
government subsidies, and to make
sure that the recovery is built on
quality family-supporting jobs.



• Funding for extensions requires a fight
in Congress
• Opponents of extended benefit argue
that unemployment extensions are
worsening the downturn, because
keeping the jobless from going back
to work, for example they say that
Unemployment Insurance makes the
unemployed lazy.



• Opponents argue that we cannot
afford extended benefits because of
the size of the deficit, but even anti-
deficit hawks question this logic.



“As a deficit hawk, I wouldn’t worry
about extending unemployment benefits.
It is not going to add to the long-term
structural deficit, and it does address a
serious need. I just feel like
unemployment benefits wandered onto
the wrong street corner at the wrong
time, and now they are getting mugged.’’
-- Bob Bixby, President of The Concord Coalition



• In order to continue the program of
federal extended benefits, 60 votes in
the Senate are needed as well as
majority support from the House, where
many conservatives and moderates are
deficit hawks.
• Unemployed people are often invisible in
the debate. Our goal is to make their
voices heard, tell real human stories, and
explain why supporting the unemployed
is good for the whole economy.


• The impact of taking money away from
the unemployed and their communities:
•Our economy will suffer. Expanded UI
programs have added money into the
economy that has saved or created 1.7
million jobs. Ending UI programs will
cut the knees off from the recovery as
billions of dollars of spending is lost and
local grocery stores and other retailers
lose customers.



• What it means to take that money both
away from the unemployed and their
families and also from their
communities:
• More families will fall into poverty. 3.3
million families kept out of poverty in 2009
because of strong UI benefits.

• Families will lose their homes. 1 out of 4
jobless workers are forced to move when
they lose their jobs, but UI benefits cuts the
chance of losing the family home in half.

Please Join Us!

UnemployedWorkers.

Please Join Us!

• Take action to call for additional
benefits.
• Get your family and friends to join
UnemployedWorkers.org.
• Become an UnemployedWorkers.org
media activist and share your story
with the public.


Authored on
October 11, 2010


Unemployment benefits the essentials

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