Nationwide—The unemployment rate remained at 3.6% in June according to this morning’s monthly jobs report. Overall, 372,000 jobs were added, and 5.9 million workers remained unemployed. The unemployment rate declined for both Black men and women, although the unemployment rate for Black workers (5.8%) remained substantially higher than the rate for white workers (3.3%). These disparities are a result of structural racism embedded in the U.S. labor market.
“Federal Reserve Chair Jerome Powell warned that interest rate hikes could increase unemployment,” said Rebecca Dixon, executive director of the National Employment Law Project. “We do not yet see the impact of higher interest rates in today’s job numbers. This gives policymakers more time to confront the full implications: Historically, when unemployment rises even slightly, it increases more substantially for Black workers, who face greater structural barriers in the workplace and labor market. Yet neither Congress nor state legislatures have taken action to bolster the unemployment insurance system. In fact, states including Kentucky, Iowa, and Oklahoma have passed legislation this year to further reduce support for jobless workers.”
The unemployment rate in June was 4.3% for Latinx workers and 3.0% for Asian workers.
In its official projections, the Federal Reserve predicts that the unemployment rate will rise for the next three years, reaching 4.1% in 2024. Many economic forecasters, including a senior economist at the Federal Reserve, predict that much higher unemployment rates than that are likely in the coming months and years.
Low unemployment has enabled some underpaid workers to seek out better jobs with higher pay and emboldened others to push for improved conditions at their current jobs, including by joining together to form unions. Increasing unemployment not only harms the workers who lose their jobs, but also threatens to undermine the labor market gains for workers who remain employed, with the harshest consequences for workers of color.
Workers who lose their jobs are unlikely to get much support from unemployment insurance: In May only 22% of unemployed workers received unemployment benefits, and benefits averaged less than $363 a week nationwide, with some states providing much less. The U.S. unemployment insurance system—a patchwork of 53 states and territories each with their own rules and procedures—was so ill-equipped to handle the surge of unemployment during the pandemic that Congress had to develop new emergency programs to support the huge numbers of workers who were excluded, increase pitifully inadequate benefit levels, and give workers more time to find employment. When pandemic UI benefits expired in 2021, they left state systems even more deficient than they had been before, with the trust funds that finance UI benefits depleted and some states acting to cut benefits.
Now as a new rise in unemployment looms, Congress must 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, 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.
