December Jobs Report: A Year of Job Growth Was a Missed Opportunity to Fix Unemployment Insurance

Nationwide—The U.S. Department of Labor’s final monthly jobs report of 2022 revealed that 4.5 million jobs were added and the number of unemployed workers fell by more than 600,000 over the last year. The unemployment rate declined from 3.9% in December of 2021 to 3.5% in December 2022.

“2022 was a year of strong job growth, thanks to powerful investments in workers and communities made by Congress and the Biden Administration,” said Rebecca Dixon, executive director of the National Employment Law Project. “Yet policymakers cannot afford to become complacent. The Federal Reserve is continuing to raise interest rates, knowing it will lead to more layoffs. Yet the unemployment insurance system isn’t ready for a surge in the numbers of jobless workers. A recession in 2023 could be devastating: Congress and state governments must support unemployed workers and shield communities from the impact.”

In her recent testimony before the House Select Subcommittee on the Coronavirus Crisis, Dixon outlined how investments in expanded unemployment benefits, paid family and medical leave, and the child tax credit enabled workers and families to survive the early months of the COVID-19 pandemic, and recommended ways to strengthen these policies to bolster communities and prepare for the next crisis.

Over the course of 2022, the unemployment rate for Black workers declined from 7.1% to 5.7%, while unemployment for Latinx workers declined from 4.9% to 4.1%. The unemployment rate for Asian workers fell from 3.8% a year ago to 2.4% in December 2022. The unemployment rate for white workers in December 2022 was 3.0% only slightly lower than the 3.2% rate a year before.

Even though the unemployment rate among Black workers has fallen more than the rate among white workers in the past year, white workers continue to experience much lower levels of unemployment overall, a result of structural racism embedded in the U.S. labor market. The fact that unemployment rates for Black and Latinx workers still have not approached those of white workers after a year of job gains also illustrates just how severe job losses were among workers of color at the beginning of the pandemic.

In the last month, job growth has slowed but remains robust. Approximately 223,000 jobs were added in December. 5.7 million workers were unemployed, a decrease of 278,000 from the prior month. The unemployment rate for Black men fell from 5.4% to 5.1% over the course of the month.

In the new year, Congress must act with urgency to implement permanent, structural reform of the unemployment insurance system. Senator Ron Wyden’s Unemployment Insurance Improvement Act would begin to address some significant ways the unemployment insurance system disproportionately excludes Black and Latinx workers, women workers, and workers with disabilities. It does so by providing at least 26 weeks of unemployment benefits, increasing coverage for part-time workers, and expanding eligibility by requiring states to consider workers’ most recent earnings and standardizing earning requirements. These reforms lay the groundwork for transforming our unemployment insurance system and enabling all workers to thrive.

As workers and advocates push for federal reform, state policymakers can act immediately to improve their own unemployment insurance systems. NELP’s UI Policy Hub offers recommendations for state advocates.

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