Unemployment Aid May Change to Help Low-Wage Women

WASHINGTON (WOMENSENEWS)–Low-wage and part-time workers, 60 percent of them women, could be the beneficiaries of the economic stimulus package being debated on Capitol Hill.

Legislators are considering how to use a $38 billion federal unemployment insurance trust fund to cushion the blow of unemployment for the hundreds of thousands of people who were blasted out of their jobs when the terrorists struck on Sept. 11. President Bush’s economic stimulus proposal includes a $5 billion provision to offer an additional 13 weeks of unemployment compensation to some workers who file for unemployment after Sept. 11.

The national unemployment rate held steady at 4.9 percent in September. But when the post-Sept. 11 employment figures are released next month, the rate is expected to climb to 5.3 percent. The jobless rate for women generally runs about a half-percentage point higher than for men.

Advocates for low-income workers would like Congress to do much more. They are hoping that the economic impact of the terrorist attacks will be the impetus for an overhaul of an outdated unemployment insurance program that does little for part-time workers, former welfare recipients who have recently joined the workforce, seasonal workers, or people who leave their jobs because their child care falls through or for other domestic reasons.

Currently, only about 40 percent of unemployed workers apply for and receive benefits. The benefit levels in many states are below the federal poverty line, and most low-wage or part-time workers never earn enough money to even qualify for unemployment benefits.

Welfare Reform, Unemployment Insurance Reform Advocates Joining Forces

Although a cadre of worker advocates have been lobbying for a more equitable unemployment insurance system for years, they have been joined of late by welfare reform advocates.

“This is the logical next step for welfare reform,” said Katie Castern, policy associate at Work, Welfare and Families, a Chicago-based organization that advocates for low-income workers.

“Welfare was the unemployment insurance of low-income people. It was their safety net. Welfare moms cycle on and off of these short-term, low-paid jobs. They always had welfare to fall back on. They don’t anymore.”

A December 2000 report from the U.S. General Accounting Office found that low-wage workers are “less likely to receive unemployment insurance benefits than are other unemployed workers even though they are twice as likely to be unemployed.” The reasons, according to the accounting office: Low-wage workers are more likely to quit work voluntarily, thus disqualifying them for benefits; they are less likely to qualify under restrictive state eligibility requirements, and they are less likely to be union members.

Bush’s proposal primarily would serve workers in New York, New Jersey and Virginia left jobless by the terrorist attacks by giving them an additional 13 weeks of federally paid jobless benefits if they haven’t found a job before exhausting their initial 26 weeks of benefits. It does not call for any changes in the eligibility requirements that would expand unemployment coverage to low-wage workers.

“It’s puzzling from a political perspective how they think they can do that,” said Richard McHugh, staff attorney for the New York-based National Employment Law Project, which advocates for changes in the unemployment insurance system. “Bush, the father, didn’t feel our pain and he lost the ’92 election. Now the son is marching down the same path.”

The National Employment Law Project and 80 other organizations, including the NOW Legal Defense and Education Fund, have sent a letter to Congress and the president urging them to strengthen the unemployment insurance system as a key ingredient of any economic stimulus package. (Women’s Enews is a project of NOW Legal Defense.)

Unemployment Insurance Generates Economic Benefits

“Unemployment insurance has a proven record as an economic stimulus. It goes right into the economy. It’s targeted, by definition, to the very communities where unemployment is hurting us,” McHugh said.

An analysis of the system conducted in 1999 by the U.S. Department of Labor found that every $1 spent on unemployment benefits generates $2.15 in economic benefit.

Unemployment insurance is a national program administered on a state-by-state basis. In general, workers who quit or are fired for cause do not qualify. To be eligible, recipients are required to actively look for full-time work and, in many cases, they are required to accept a job that is offered. Benefits are paid on a sliding scale based on total earnings and are limited to 26 weeks.

Despite those general guidelines, inequities between states are numerous, both in terms of eligibility requirements and benefit levels.

For example, a worker employed full-time for the last six months could qualify immediately for benefits in Washington, but not in Illinois, according to an analysis by the Economic Policy Institute, a nonpartisan think tank that looks at economic equality issues. A former welfare recipient who worked for six months at minimum wage would not qualify for any benefits in eight states. If that same minimum-wage worker were employed full-time for a year, she or he would qualify to receive a weekly check of $216 in Connecticut, but only $81 in California.

Several proposals floating around Capitol Hill could make it easier for low-income workers to qualify for benefits, and a plan to supplement state checks with federal money could help to raise unemployed workers’ compensation above the poverty level.

Progressive Proposal Would Use Federal Funds to Increase State Payments

A Democratic proposal from Sen. Edward M. Kennedy, Massachusetts, would remove a requirement that workers look for full-time work to qualify for jobless benefits, a limitation that keeps 600,000 part-time workers from qualifying for benefits. In addition, Kennedy’s plan would extend unemployment benefits for all workers who exhaust their initial 26 weeks of benefits for an additional 13 weeks. And it would use federal funds to supplement state payments, which average $217 a week, by whichever is greater: 15 percent or $25 a week.

Those changes, along with some proposals for helping unemployed workers pay for health insurance and obtain job training, would carry a price tag of as much as $50 billion.

A more generous proposal is being floated by the Progressive Caucus, including caucus leader Rep. Dennis Kucinich, Democrat from Ohio, who see the need for an economic stimulus program as a chance to finally expand a safety-net system that primarily has served white males in the past.

Most of their proposed changes would benefit women, who make up the majority of low-wage, part-time workers.

The Progressive Caucus idea calls for changes in the so-called “base period” of employment to include the current quarter. It would expand eligibility to include workers who quit for personal reasons–the loss of reliable child care, domestic violence, a change that makes it impossible to balance work with family life. In addition, they would like to supplement unemployment benefits with $100 weekly to ensure that jobless workers are living above the poverty level. One congressional source estimated such a generous plan would cost $200 billion; another put the figure at closer to $60 billion.

At a meeting late last week, the House Democratic Caucus adopted the Progressive Caucus proposal for a $100 weekly federal supplement for 39 weeks for all recipients.

Cindy Richards writes a weekly column for the Chicago Sun-Times. As a reporter and editorial writer, she has covered health care, children’s issues, education and women’s issues. She was nominated for a Pulitzer Prize in 1991.