Nationwide— In June, 7 million workers were unemployed and the unemployment rate remained steady at 4.1% according to new data from the Bureau of Labor Statistics. The unemployment rate increased for Black workers to 6.8% compared to a decreased rate of 3.6% for white workers. The unemployment rate for Latinx workers was 4.8% and the unemployment rate for Asian workers was 3.5%. Disparities in unemployment rates are a result of structural racism in the U.S. labor market, including persistent occupational segregation.
“Despite today’s steady unemployment numbers, the U.S. may be heading for significant economic turmoil, and the nation’s unemployment insurance system is not up to the task of supporting displaced workers or the economy,” said Rebecca Dixon, president and CEO of the National Employment Law Project (NELP). “When millions of workers lost their jobs during the COVID-19 pandemic, workers demanded action. Congress temporarily expanded unemployment insurance, contributing to a strong and rapid economic recovery. But these expanded benefits were terminated, leaving an inadequate system that is unprepared for another recession. Unemployment insurance can’t fulfill its function of stabilizing the economy when millions of workers are excluded from benefits and many states pay benefits too low to live on. Policymakers need to act quickly to fix the system before a crisis hits.”
Economists find that during an economic downturn when mass layoffs occur, unemployment insurance (UI) puts money in the hands of the most directly impacted workers so they can keep spending on basic needs. Supporting consumer spending keeps businesses from cutting back further, preventing a vicious cycle of more and more layoffs. A 2021 study found that every $100 spent on UI benefits generated an additional $92 of private sector economic activity. By sustaining consumer spending and stabilizing the economy, a strong UI system helps businesses as well as workers and their families.
Unemployment insurance can’t fulfill its function of stabilizing the economy when millions of workers are excluded from benefits and many states pay benefits too low to live on. Policymakers need to act quickly to fix the system before a crisis hits.
In June, 12,750 workers in manufacturing, 10,853 workers in professional, scientific, and technical services, 6,175 workers in wholesale trade, and 2,946 public servants who worked for the federal government lost their jobs. These newly unemployed workers deserve stability and support as they seek new work.
Congress must address rising economic uncertainty by passing The Unemployment Insurance Modernization and Recession Readiness Act, introduced in the previous congress by Senators Ron Wyden (D-OR) and Michael Bennet (D-CO) and Representative Don Beyer (D-VA). The bill sets nationwide standards for UI, 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. The bill also establishes a new, federally funded Jobseekers Allowance to support jobless workers who would not otherwise be covered by unemployment insurance and modernizes the Extended Benefits program that makes additional weeks of unemployment benefits available in times of high unemployment. State policymakers across the country should also act to improve their state unemployment insurance systems to better support workers and the economy.
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