March Jobs Report: Many Jobless Workers Excluded from Unemployment Insurance

Nationwide—In March, the unemployment rate was 3.5%, a slight decline from 3.6% the previous month. This morning’s monthly jobs report from the Bureau of Labor Statistics also shows that 236,000 jobs were gained. The unemployment rate for Black women fell from 5.1% in February to 4.2% in March, even as more Black women entered the labor force. Yet racial disparities persisted: The unemployment rate for white men and women was 3.0%. These disparities are a result of structural racism in the U.S. labor market.

“As job growth continues to slow, it’s critical that policymakers act to support the millions of jobless workers who are shut out of the unemployment insurance system,” said Rebecca Dixon, president and CEO of the National Employment Law Project. “Although 5.8 million workers were unemployed in March, fewer than 2 million claimed unemployment benefits. Many jobless workers simply are not eligible, such as freelancers and other self-employed workers. Workers misclassified as independent contractors are excluded from UI unless they can successfully prove they are employees. Many states also shut out low paid and part-time workers. And undocumented workers do not qualify for unemployment benefits even when their employers pay into the system.”

Early in the COVID-19 pandemic, Congress extended unemployment support to freelance workers and to the millions of construction, home health care, landscaping, janitorial, and other workers who are  misclassified as independent contractors by their employers. As a result of structural racism in the labor market, workers of color and immigrant workers are more likely to be employed in jobs where misclassification is widespread.

Expanded unemployment benefits not only supported jobless workers, their families, and communities but also fueled an especially rapid and robust recovery from the pandemic recession. Yet when pandemic benefits expired, millions of workers were once again excluded from unemployment insurance and will have no support if they become unemployed in the next recession.

Excluded workers across the country are demanding a more inclusive social infrastructure. In Colorado, immigrant workers and their allies organized for and won a new law that provides benefits to jobless workers who are otherwise excluded solely as a result of their immigration status. In New York, Washington, California, and other states, workers are mobilizing for social insurance that includes and supports all jobless workers.

Efforts to expand coverage for excluded workers will disproportionately support workers of color. The unemployment rate among Latinx workers was 4.6% in March, and the unemployment rate for Asian workers was 2.8%.

In addition to state efforts to expand eligibility, 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.