The Job Ahead: Advancing Opportunity for Unemployed Workers

America’s unemployment insurance (UI) program has not kept up with the needs of America’s workers. In the year following the expiration of federal benefits for people out of work for longer than six months at the end of 2013, the percentage of unemployed receiving any benefits averaged just 27 percent, a record low. While 2014 was the strongest year of job gains yet during this recovery, there are still near-record numbers of long-term unemployed, along with millions more on the sidelines of the labor market, still without work and without benefits. Many who have found jobs are employed part time, often in lower-wage retail and fast-food jobs, because there are not enough full-time jobs to go around. While the official unemployment rate is now 5.6 percent as of this publication, the percentage of people who are working, also known as the employment rate, is still among the lowest levels in three decades.

Many experts say that the nature of work is irrevocably changing, and that workers face a future of more and longer periods of unemployment and underemployment. Fortunately, we can learn from the Great Recession and apply those lessons to future periods of economic instability. Governors and state legislatures can take steps now to ensure that workers can get back on their feet and participate in the growing economy that we have today, and the changing economy that we will have tomorrow.

This paper presents a menu of state policy options that respond to the continued crisis of long-term unemployment and the nation’s growing reliance on part-time and temporary work. It highlights tried-and-true policy responses as well as new innovations that address the needs of the current workforce. Key steps for state lawmakers to take are as follows:

Preventing Long-Term Unemployment

  1. Prioritize funding for comprehensive reemployment services, to offset declining federal commitment. State lawmakers should consider supplemental contributions to increase funding to hire additional career counselors and to sharpen state worker profiling systems that identify likely long-term UI recipients.
  2. Encourage part-time employment while claimants look for full-time jobs by amending state partial unemployment insurance rules. Ensuring that part-time earnings thresholds for partial unemployment insurance benefits are set high enough and that claimants are not financially penalized for accepting part-time work is sensible public policy.
  3. Prevent job losses during recessions by enacting work-sharing programs. To date, 29 states and the District of Columbia have enacted work-sharing laws. The remaining states should enact work-sharing laws as soon as possible in order to give business owners the option to avert layoffs when facing temporary downturns.
  4. Prohibit hiring discrimination against jobless workers and enlist businesses to recruit qualified unemployed job applicants. In addition to legislative intervention, governors should partner with human resources and employer groups and local workforce and economic development agencies to press local businesses to adopt fair hiring practices.

Expanding Unemployment Insurance Access for Lower-Wage Workers

  1. Extend eligibility to part-time workers and anyone who wants to reduce their schedules for compelling reasons. A workable standard could provide that any otherwise eligible individual who is seeking only part-time work is not disqualified as long as the work being sought is for at least 20 hours per week.
  2. Strengthen state partial unemployment insurance rules to supplement earnings for underemployed workers. Raising weekly earnings thresholds and minimizing the value of earnings deducted from a claimant’s benefit would allow underemployed workers to maintain their basic needs, while boosting community spending levels.
  3. Eliminate arbitrary temporary worker disqualifications. State UI laws should treat each assignment of temporary work as a separate contract of employment, and only claimants who refuse an offer of subsequent temporary work that is suitable in terms of wages, hours, and conditions should be subject to disqualification.
  4. Broaden good-cause rules for workers who voluntarily quit their jobs. While states should continue to adopt individual exceptions, including not disqualifying workers who quit because of transportation difficulties, the strongest approach would be to define good cause as any compelling reason for leaving work, whether or not it is related to the person’s job.

Providing Greater Help for Long-Term Unemployed Jobseekers

  1. Establish subsidized work programs for long-term jobless workers, including unemployment insurance exhaustees. As state budgets recover from the recession, lawmakers should appropriate the necessary funding to launch wage subsidy programs that are open to private, non-profit, and public employers, and should develop alternative funding mechanisms to match investments from foundations and business.
  2. Provide up to 26 weeks of additional unemployment benefits for jobless workers receiving training. State investments in facilitating access to education and training help workers permanently improve their income prospects and reduce future risk of unemployment, while helping to ensure a better match between what employers need and what workers can offer.
  3. Better connect long-term unemployed workers and families with government support programs. Without a deliberate, coordinated response across state agencies, families experiencing extended unemployment durations will continue slipping through the cracks of the human services system.
  4. Provide 26 weeks of unemployment insurance benefits to jobless workers. Once state economies are more firmly in recovery from the Great Recession, lawmakers in states with reductions to the duration of benefits should reverse them. Lawmakers in states expecting to pass trust fund solvency legislation should be prepared to counter proposals anchored by deep durational cuts with balanced financing measures.

Shoring Up Unemployment Insurance Infrastructure

  1. Adopt responsible financing measures to ensure preparation for the next recession. For the federal-state UI program to function as a meaningful automatic stabilizer of economic activity, states need to make a clear commitment to the principles of forward financing. States facing the long-term prospect of eroding benefits tied to inadequate financing should examine the efficacy of employee contributions as a means of improving both solvency and benefits.
  2. Dedicate greater resources to state unemployment insurance program administration. States should maintain some form of dedicated tax that ensures they have the resources to maintain efficient UI systems through the ebbs and flows of federal appropriations.
  3. Reduce access barriers for low-income workers and workers with language and literacy limitations. Unemployment insurance must be accessible to all workers who lose jobs involuntarily and have earned sufficient wages to qualify for benefits.

More than five years after the official end of the most significant and sustained recession since the Great Depression, nine million Americans are counted as unemployed and another six million want to work but have quit looking. Millions more workers are underemployed or working in temporary positions, even though they would prefer to be employed in more stable arrangements. By adopting the policy recommendations featured in this report, states can take important steps toward helping these workers make the transition to good employment and financial security. Equally important, these measures will better prepare state unemployment insurance and workforce agencies for recessions in the future, while mitigating the effects on workers.

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