Why Today’s Graduates Need a Jobseekers’ Allowance

Finding a decent-paying job right out of school is never easy. It is especially tough when employers aren’t eager to hire at all.

That’s the situation today’s graduates face. For young people without a college degree, good jobs were already hard to land. But recent college graduates are also finding the job market to be unusually difficult to navigate. And that’s not just based on anecdotal evidence.

New data from the New York Federal Reserve shows that young people entering the labor market with college degrees are experiencing recession-level rates of unemployment. Over the last twelve months, the unemployment rate for young college grads has averaged 5.5 percent—higher than for any similar period, outside of the peak COVID-19 pandemic era, going back to the aftermath of the Great Recession.

Those who have found work also saw the overall pullback in hiring resulting in faster and wider layoffs. Black women endured the largest job losses over the last year, and those losses hit Black women college grads particularly hard.

To help transition to a good job, all workers, including recent graduates, need the kind of financial support provided by unemployment insurance (UI) benefits. Unfortunately, in far too many cases, new entrants or reentrants to the labor market aren’t eligible for UI. That’s why NELP helped to craft a new jobseekers’ allowance as part of the Unemployment Insurance Modernization and Recession Readiness Act in 2023, which has since been reintroduced in Congress.

This allowance would be a temporary form of UI payment of up to $250 per week for a maximum of six months. This modest, short-term benefit would provide critical support for jobseekers, including young graduates who are new to the job market, as well as millions of other workers not eligible for regular UI, such as self-employed and so-called “gig” workers who alone count for more than 26 million workers. The jobseekers’ allowance would also benefit those reentering the labor market after taking time off for family caregiving and those looking for work after incarceration, who are particularly vulnerable to joblessness and face many barriers to employment.

Since UI was enacted in the 1930s, the U.S labor market has transformed in terms of the

workforce and the nature of work. Yet, despite these changes, few updates have been made to the UI system to reflect today’s economic realities. As a result, the U.S. has been ill-prepared for economic downturns like the recent pandemic-induced recession.

Enacting a jobseekers’ allowance now would foster a more robust, inclusive, and equitable UI system for the many millions of workers who are otherwise currently at a significant disadvantage when trying to find a job.

NELP prioritized designing the jobseekers’ allowance proposal and has advocated this powerful benefit for a decade. It was needed then—and in today’s rough job market, it’s needed even more now.