On President Obama’s Proposed Unemployment Insurance Program

Statement of Christine Owens, Executive Director, National Employment Law Project::

“The National Employment Law Project applauds President Obama’s proposals to reform and restore the unemployment insurance (UI) program. This social insurance program is of crucial importance to so many workers and their families, as they transition from one job to the next, and struggle in the interim to meet ongoing household expenses. In the aggregate, weekly benefit payments stabilize our consumer-based economy during recessions.

“Unfortunately, too many states’ UI trust funds were unprepared for the last recession after years, or sometimes decades, of irresponsible funding practices brought on by short-sighted and unnecessary tax cuts to already low UI tax rates. Instead of being ready to weather a recession, states were unprepared, especially for a recession of the magnitude that we experienced from 2008 to 2010, and the stagnant recovery that followed. Sadly, rather than learning from the clear lessons of the Great Recession and shoring up their UI programs and trust funds, far too many states have begun a race to the bottom, slashing weeks of benefits and levels of wage replacement, and making it harder for people to qualify or navigate the application process.

“If enacted, President Obama’s proposals would stem the tide of the dismantling of state UI programs. And now is precisely the time to do so — when job growth is strong, unemployment has returned to pre-recession levels, and state coffers are recovering. But our economy has yet to achieve a full recovery, with more than two million workers still struggling with long-term unemployment, while others wait on the labor market’s sidelines for job opportunities to strengthen further. It is incumbent on all of us to work together to restore vigor to state UI programs before the next recession, which though not imminent, is inevitable.

“We wholeheartedly support President Obama’s proposals to ensure that more workers qualify for and receive UI when they lose jobs through no fault of their own, and we commend the focus on re-employment, re-training, job retention, and responsible forward-funding of UI trust funds. Though NELP has been and remains skeptical of wage insurance, we appreciate that the Administration has put forth a narrowly targeted proposal, aimed at lower-wage workers who have fewer options than others in this economy. We welcome the opportunity to discuss whether and to what extent wage insurance may be appropriate as part of more robust state UI programs that work to support and re-employ workers in jobs that make the best use of their skills and abilities.”


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