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Giving Compass' Take:
• An article at Brookings offers suggestions for how to fix the current failures of unemployment insurance for low-wage workers impacted by the pandemic.
• What sort of consequences are millions of unemployed Americans facing as businesses continue to shut down? How can you support legislation to help them? What can you do on your own to support those experiencing economic shocks from the pandemic?
• Learn more about how to support unemployed low-wage workers here.
As states and municipalities across the country go on lockdown to prevent the spread of COVID-19, state unemployment websites have experienced unprecedented spikes in unemployment claims, totaling over 10 million in the past two weeks alone.
One of the unique features of this crisis is that it is disproportionately impacting low-wage workers in the service sector more than previous recessions. This problem is being compounded by the fact that our unemployment system has been engineered to be less equipped to protect these workers. Many states were forced to borrow federal money to bail out their unemployment insurance (UI) trust funds in the wake of the Great Recession and responded by tightening eligibility requirements for UI, lowering benefit levels, and reducing benefit durations.
By the time COVID-19 broke out, UI funding and staffing levels were at an all-time low. State UI systems disproportionately excluded those who were new to the labor force, not consistently employed full time in the previous year, or whose incomes were too low to meet income thresholds. Essentially, UI systems tended to exclude exactly the types of workers this pandemic is affecting the most.
Millions of jobless Americans are facing the harsh reality that the systems they thought would be there in a time of need are all jammed up. In this brief, we explain how UI typically worked before the pandemic, how federal legislation temporarily reformulates UI to respond to this crisis, and what opportunities the pandemic may open up for building a more functional UI safety net in the future.
Read the full article about unemployment insurance and COVI-19D by Annelies Goger, Tracy Hadden Loh, and Caroline George at Brookings.