More than half the people who became unemployed during the most recent recession experienced yet another letdown when they filed for unemployment insurance benefits and learned they were ineligible, according to a new report.
Eligibility requirements was identified as the most serious shortcoming of state unemployment policies in “Failing the Unemployed: A State-by-State Evaluation of Unemployment Insurance Systems,” which calls for states to reform their policies to cover more people for a longer period of time.
Shari Kertez, spokeswoman for the Illinois Department of Employment Security, which oversees distribution of unemployment insurance, declined to comment on the report, but she did say the state’s benefits extension program is underway. Illinois received an additional $376 million as part of a stimulus package signed March 9 by President Bush that gave $8 billion to states to extend their unemployment benefits.
Kertez said an estimated 180,000 state residents should receive notices in the next couple of weeks about how they can apply for an additional 13 weeks of unemployment insurance if they are still unemployed.
In Illinois, just over 43 percent of the people who sought benefits last year received them, the report states. Between Sept. 11 and Dec. 31, 65,666 Illinoisans exhausted their unemployment insurance benefits.
“It’s clear states should be doing a much better job to prepare for victims of recession,” said Maurice Emsellem, public policy director for the National Employment Law Project, which conducted the study with the Economic Policy Institute and the Center on Budget and Policy Priorities.
On the national level, the report concludes the people most in need of benefits–low-income and part-time workers, those who recently entered the labor force, former welfare recipients and women–are the people most likely to be deemed ineligible to receive them.
States were evaluated on five areas: eligibility requirements, adequacy of benefit levels, trust fund adequacy, recession preparedness and fairness of tax systems.
Only Rhode Island and Vermont passed in all five areas.
States that failed in three or more areas were given an overall failing grade, including Illinois, which was criticized for its eligibility requirements, inadequate trust fund and poor recession preparedness.
Researchers are calling for swift reform and say lack of funding is no longer an excuse, citing the recent passage of the economic stimulus package. Though Illinois’ trust fund was described as inadequate, most states had adequate funds to handle claims during the recession even before Congress passed an extension, Emsellem said.
“Now, every state has available funds to pay for many of the necessary reforms,” he said.
The report recommends that states extend benefits automatically when the state unemployment rate reaches 6.5 percent; provide a stronger safety net, especially for low-wage and part-time workers, and ensure that unemployment insurance tax policies are balanced to adequately fund trust funds so that more people can collect unemployment benefits.
This year, unemployed workers have been exhausting their benefits at an average rate of 80,000 per week.
Unemployed workers who are eligible may receive benefits for up to 26 weeks and can apply for up to a 13-week extension. Researchers found that 40 percent of workers nationally did not receive benefits for the full 26 weeks, which cuts their extension eligibility to less than 13 weeks. The federal government has extended unemployment benefits to workers in each of the last seven recessions. But eligibility is determined at the state level. Overall, workers must meet the following criteria: sufficient wages in the past year, involuntary loss of unemployment and availability to work.
Researchers say these requirements often deny benefits to two groups: part-time workers and those who just recently joined the labor force.
