Unemployment Compensation in Ohio: Protecting a Critical Safety Net for Working Families and the Economy 
(September 2004)
By Rick McHugh and Andrew Stettner, National Employment Law Project and Zach Schiller, Policy Matters Ohio

To view the full .pdf version of the report click here

Executive Summary

Unemployment compensation provides crucial basic support to jobless workers and their families, and boosts the economy by maintaining consumer spending when unemployment rises. This report examines Ohio’s unemployment compensation system, and finds that while it has provided significant assistance to jobless workers and the economy recently, ill-advised limitations upon eligibility undermine the program’s ability to achieve its goals. 

Unemployed Ohioans are less likely to receive unemployment compensation than jobless workers elsewhere in the United States. For every 100 jobless Ohio workers, only 36 got unemployment compensation (UC) in 2003. Nationally, 41 of every 100 jobless workers received benefits last year; states with the greatest coverage paid to well over 50 of every 100 unemployed residents.

Workers in Ohio must earn more than those in almost any other state in order to qualify for unemployment compensation. Ohio’s monetary eligibility requirement, set at 27.5 percent of the state’s average weekly wage, amounts to $181 a week in 2004. This means that a minimum-wage worker working 35 hours weekly and making $180.25 each week in 2004 ($9373) is ineligible for benefits in Ohio. Our analysis of Census Bureau data finds that: 
• Extending UC monetary eligibility to individuals working 20-35 hours per week and at least 20 weeks per year at the minimum wage or more (roughly $100/week) would expand potential UC eligibility by 352,000 individuals, or an additional 6.8% of the total Ohio workforce.
• On average, these currently excluded workers are employed 44 weeks a year, not significantly less than the 50 weeks that higher-wage workers currently eligible for UC worked on average.
• Sixty-seven percent of workers who potentially would become eligible for benefits are women. In comparison, 46.4 percent of workers qualifying under current UC rules are female.

Improving monetary eligibility would not cost a great deal. The Ohio Department of Job and Family Services has estimated that if monetary eligibility rules covered individuals working the equivalent of at least 20 hours a week for 20 weeks, it would cost between $4 million and $6 million a year, or less than half of one percent of benefit costs.

Part-time workers in Ohio face other obstacles in obtaining UC benefits. Agency practice results in the denial of benefits to most claimants who state that they are limiting their availability to part-time work, even where these individuals previously worked part-time. The exclusion of part-timers disproportionately affects low-wage and women workers. A growing number of states, recognizing that the exclusion of part-time workers is based on outdated assumptions that part-time workers are not really supporting families, have expanded eligibility for these workers. 

Unemployment compensation helps both jobless workers and the economy by providing benefits to involuntarily jobless workers. UC programs best perform these functions by building up reserves from employer payroll taxes during economic good times in order to pay UC benefits during downturns. Ohio’s UC program paid more than $4 billion in benefits overall in 2001, 2002, and 2003, helping hundreds of thousands of Ohioans each month. By drawing down reserves to pay higher UC claims, the program provided a net $2 billion boost to the state’s economy over and above UC taxes paid by Ohio employers during these years.