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Staggering Job Losses Highlight Need For Improvements to Unemployment Insurance
House
Legislation would modernize UI system
December 05, 2008
WASHINGTON, D.C.
-- The
Bureau of Labor Statistics announced today that the U.S. economy lost 533,000
jobs last month, the largest one-month loss since 1974. Ways and Means Committee Chairman Charles B.
Rangel (D-NY) and Income Security and Family Support Subcommittee Chairman
McDermott (D-WA) responded by calling for the swift passage of the Unemployment
Insurance Modernization Act (HR 2233). This legislation would provide
up to $7 billion for States to improve unemployment insurance coverage for many
jobless workers who are now denied those benefits.
“Whether you
care about fairness for workers or about stimulating the economy, ensuring that
workers who lose their jobs through no fault of their own have access to
unemployment benefits is the right thing to do,” said Chairman
Rangel. “We recently extended unemployment benefits, and now we need
to take the next step to help States improve the program.”
"For months
we have been applying tourniquets by extending unemployment insurance
benefits,” said
Income Security and Family Support Subcommittee Chairman McDermott. “While important in the short run because of
the immediate positive economic impact to the economy and the modest assistance
UI benefits provide struggling Americans, we know the UI system itself is not
up to the challenges of a 21st Century economy and modernizing it
will be one of my top priorities in the new Congress.”
The Ways and
Means leaders also believe that the growing number of underemployed Americans,
which has now topped a staggering 13%,
provides further evidence of the urgency to act as soon as possible.
The Unemployment
Insurance Modernization Act (HR 2233) would provide funds to help States enact
specific reforms to improve unemployment insurance coverage among low-wage,
part-time and other workers who now have trouble accessing benefits when they
lose their jobs. For example, the Government Accountability Office (GAO)
has found that low-wage workers are only one-third as likely to receive
unemployment benefits as higher wage workers even though they are more likely
to become unemployed. It has been projected that if States came into
compliance with this legislation, an additional 500,000 unemployed workers
would be able to collect jobless benefits. Economists consistently find
that unemployment benefits are one of the most effective forms of stimulus.
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