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Monday, October 07, 2013

'Why Isn't Poverty Falling? Weakening of Unemployment Insurance Is a Pivotal Factor'

The social safety net for unemployed workers is weakening:

Why Isn't Poverty Falling? Weakening of Unemployment Insurance Is a Pivotal Factor, by Arloc Sherman, CBPP: The poverty rate remained unchanged at a high 15.0 percent in 2012, the third full year of an economic recovery that officially began in June 2009. One key reason why poverty has remained virtually frozen despite continued economic growth is the weakening of unemployment insurance (UI). ...
UI benefits kept 1.7 million ... jobless workers and their families ... above the poverty line in 2012... This was 600,000 fewer than in 2011 and 1.5 million fewer than in 2010... To be sure, the decline partly reflects a positive development: fewer workers are unemployed, so fewer are eligible for UI benefits. But that explains only a small part of the decline. ...
The chief reason for the decline is the dwindling likelihood that an unemployed worker will receive UI. The number of UI recipients for every 100 unemployed workers fell from 67 in 2010 to 57 in 2011 and 48 in 2012.
In fact, while the number of jobless workers has been falling, the number of jobless workers who receive no UI benefits has been rising and is higher now than at the bottom of the recession in 2009. ...
The share of unemployed workers getting UI fell for several reasons. First, the length and depth of the jobs slump has left many workers unable to find work before their UI benefits run out. Second, several states have cut the number of weeks of regular, state-funded UI benefits. A third and critical reason is that in 2012, Congress provided fewer weeks of federal UI benefits, which go to long-term unemployed workers. ...
What’s left of federal UI (the EUC program) is scheduled to expire at the end of December. If Congress does not extend it, all long-term unemployed workers receiving EUC will be cut off at that point, and other workers who qualify for UI will be limited to whatever their state’s regular UI program provides — 26 weeks in most states.

    Posted by on Monday, October 7, 2013 at 04:09 PM in Economics, Social Insurance, Unemployment | Permalink  Comments (26)


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