Expand Unemployment Insurance for People Out of Work

Workers deserve economic security between jobs. Yet exclusionary and under-resourced unemployment insurance systems leave jobseekers struggling to get by.

Unemployed workers stand in a line on a sunny day.

1 in 4 unemployed workers receive unemployment insurance.

Why Unemployment Insurance Matters

When workers lose their jobs, unemployment insurance (UI) should sustain them until they can find new employment. At the height of the COVID-19 pandemic, tens of millions of jobless workers relied on UI benefits to make ends meet, supporting both their families and the nation’s economy until it could thrive again. The devastation of severe job losses made it clear that state and federal governments need to strengthen our unemployment insurance (UI) systems before a crisis hits, not undermine them further.

In many states, people who lose their jobs are unlikely to qualify for UI because policymakers created rules that exclude them. The majority of unemployed workers do not receive any UI benefits. Workers who do receive UI typically receive benefits that are too low to adequately support them and their families, and benefits are often cut off before workers can find new jobs.

UI should act as a bridge so that anyone who is out of work can sustain themselves as they seek a new job. When it works well, it supports the economy as a whole and allows jobseekers to keep their housing and pay for necessities—including transportation to job interviews.

A portrait of a Black woman holding a pandemic unemployment assistance overpayment notice.

Unemployment Insurance Is About Racial and Economic Justice

Workers of color consistently face higher unemployment rates as a result of structural racism in U.S. labor markets. Unemployment rates among Black workers are frequently twice as high as those of their white counterparts, a disparity that persists even after accounting for gender, age, and education.

Yet unemployed Black workers are less likely to be eligible for or to receive UI. One recent study found that unemployed Black workers were consistently 24% less likely to receive UI than their white counterparts over a span of 30 years.

When they do receive UI support, unemployed Black workers get lower benefits on average than white workers both because they are disproportionately segregated into lower-paying jobs and because Southern states, where a majority of Black workers live, have established benefit formulas that pay the lowest benefits in the nation. This disparity causes particular hardship because the typical Black worker has fewer financial resources to cushion the impact of unemployment as a result of decades of public policy that systematically excluded Black households from wealth-building opportunities.

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Unemployment Insurance FAQs

Unemployment insurance should ensure that workers, employers, and the economy will be better equipped to withstand the next economic downturn and come back thriving.

NELP Urges Congress to Pass the UI Modernization and Recession Readiness Act

The Unemployment Insurance Modernization and Recession Readiness Act lays the groundwork for transforming the nation’s unemployment insurance system and enabling all workers to thrive.

The bill modernizes the Extended Benefits program that makes additional weeks of unemployment benefits available in times of high unemployment. It also makes essential reforms to the regular unemployment insurance system, including mandating that states offer at least 26 weeks of unemployment benefits, raising benefit amounts to replace a greater share of workers’ prior earnings, and increasing coverage for part-time workers, temp workers, and workers whose earnings fluctuate over time. Finally, it creates a Jobseeker’s Allowance to aid workers who don’t otherwise qualify for UI.

The UI Modernization and Recession Readiness Act takes a major step toward fixing unemployment insurance so that all workers—and the economy as a whole—can thrive.

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