July Jobs Report: As Job Growth Slows, Policymakers Must Strengthen Unemployment Insurance

Nationwide — The unemployment rate ticked down to 3.5% in July according to the Bureau of Labor Statistics. The economy gained 187,000 jobs. The unemployment rate for Black workers fell to 5.8% but still nearly doubled the unemployment rate of white workers, at 3.1%. More than 1 in 5 Black teenage workers (age 16-19) were unemployed compared to fewer than 1 in 10 white teenage workers. These disparities are a result of structural racism in the U.S. labor market.

“As job growth slowed in July, 5.8 million workers were unemployed,” said Rebecca Dixon, president and CEO of the National Employment Law Project. “For a worker who suddenly loses their job, unemployment can be a catastrophe—no matter what the larger economic environment is. Policymakers must recognize the powerful positive impact unemployment insurance benefits have on the lives of workers and their families, and act now to strengthen the system for the future.”

The crucial importance of unemployment benefits is apparent when workers recount their personal experiences. As Valeria from Kentucky told one of NELP’s partners:

“I am a member of United Steelworkers Local 1693. I’ve been employed at American Synthetic Rubber Company in Louisville, Kentucky, for 27 years. I’m a single mother who has relied on only one income to raise my son. After I was first laid off in 2009, I had no idea how I was going to support us. Unemployment insurance enabled me to keep a roof over our heads, the lights, water, and gas on for the duration of the layoff. I was laid off again during the COVID-19 pandemic in 2020 for four months, and again unemployment insurance benefits filled the gaps of my lost income and allowed me to continue taking care of both me and my son. The federal pandemic unemployment benefits I received were invaluable to me during such a period of uncertainty.”

Tiffany from Ohio explained why the enhanced federal unemployment benefits provided during the early days of the pandemic were so important to her family:

“I was laid off on March 13, [2021]. Even though it took a month to begin receiving my unemployment benefits, I am so thankful for them. Without them, my family of 4 wouldn’t have had anything at all coming in. The extra federal money per week enabled me to pay my bills and helped me provide for my children in such a traumatic situation. The unemployment insurance system is definitely needed in this country, and the extra federal money is also needed!”

A strong unemployment insurance system is critical for all workers. At the same time, it is particularly important for workers of color who face higher unemployment rates because of occupational segregation and discrimination in the labor market. The July unemployment rate was 4.4% for Latinx workers. Asian workers’ unemployment rate was 2.3%.

Congress must act to build an unemployment insurance system that will support all workers at all times. This includes establishing minimum federal standards for UI eligibility, benefit duration, and benefit adequacy that all state unemployment systems must meet; ensuring equitable access to UI benefits; modernizing and reforming the Extended Benefits program; and establishing additional emergency UI programs that automatically trigger on during periods of high unemployment. This also includes adequate and sustained funding for UI administration, oversight, and IT modernization, which is essential to ensure timely and accurate payments. A transformed unemployment insurance system will strengthen the economy and enable all workers to thrive.

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