Christine L. Owens(WOMENSNEWS)–Kathy M. Henry, a 37-year-old single mother of three, has been out of work for a year.

She and 15 other employees of a Chicago advertising agency were let go last August after the firm lost a major contract.

"I never expected to be in this position," said Henry, who earned a bachelor’s degree while working full-time as an administrative assistant. "In addition to sending out hundreds of resumes, I’ve networked, cold-called and attended job fairs. I’ve had a few job interviews but no offers. I’ve considered moving to another state where job prospects might be better, but my kids are doing well and don’t want to leave their schools."

Henry’s financial situation turned grim in February when her $322 a week in unemployment insurance expired after 26 weeks, the juncture when benefits end for most recipients. "I worry about our family ending up homeless when my meager savings are gone, and I can no longer afford to pay the $682 a month rent on our modest apartment," she said.

She did get some relief from the 13-week extension of jobless benefits that Congress authorized at the end of June in an $8.2 billion amendment to a $162 billion military spending bill for the wars in Iraq and Afghanistan.

Another extension may be necessary after the current one expires in March if projections of a 6.9 percent unemployment rate by December 2009 are on target.

In July 1.6 million workers–over 40 percent of them women–had been jobless for at least 27 weeks.

Service Sector Loses Jobs

"Once concentrated among males employed in manufacturing plants in the Middle West, long-term unemployment has spread to service sectors across the country where large numbers of women work in retailing, financial services, real estate and other industries," said Christine L. Owens, executive director of the New York-based National Employment Law Project.

The impact on women is severe, said Monica Halas, a senior attorney in the employment unit of Greater Boston Legal Services, which provides free civil legal assistance to low-income people.

"Women earn less than do men and have fewer assets to fall back on when they are unemployed for prolonged periods," she said. "Low-wage women lose their health care and suffer life-threatening illnesses. Foreclosures rise, leaving women and children homeless. Domestic violence becomes more common."

In July, 5.7 million workers–the highest number in 14 years–reported they had worked part-time because full-time jobs were unavailable.

The unemployment rate rose from 5.5 percent in June to 5.7 percent in July, the highest rate since March 2004 and a percentage point over the level a year ago. However, job loss was more prevalent than the July total indicates because the Bureau of Labor Statistics did not include in its calculations the 5.2 million "discouraged workers" who have given up trying and no longer believe that there are jobs for them.

Hidden Unemployment

"There is a lot of hidden unemployment," said Ross Eisenbrey, vice president of the Economic Policy Institute, a Washington-based progressive research organization. "In July 5.7 percent of workers said they worked part-time because full-time work was unavailable. If the Bureau of Labor Statistics had included the number of discouraged and part-time workers in its calculations, the unemployment rate would have been 10.8 percent."

Even if the job market recovers, critics say that the unemployment insurance system needs an overhaul to meet the needs of the 21st century labor force, with its large number of working women, many of whom don’t currently qualify.

Not only are benefits running out on many workers before they can find work, the checks are fairly meager, averaging $290 a week, which would equate to an annual salary of $15,080. Federal poverty guidelines consider a family of four poor if it relies on less than $21,200 in income.

Only 37 percent of unemployed workers now receive unemployment benefits, down from 55 percent in 1958 and 48 percent in 2001, according to the Government Accounting Office. Fewer than 15 percent of low-wage workers receive unemployment benefits because they don’t meet eligibility criteria.

Out-of-Work But Not Qualified

Eligibility for jobless benefits varies from state to state, but typically an applicant must have had earnings for four of the past five calendar quarters and reach a specified threshold in earnings. These rules can land a heavier blow on seasonal workers in tourism, who may have trouble qualifying. Applicants are also typically required to earn a certain amount in the quarter of highest earnings; hourly workers often don’t qualify because their wages are too low.

Leaving a job voluntarily to take care of an ill or disabled family member or because child- or elder-care arrangements have collapsed also disqualifies applicants.

"As a result, low-income workers like single mothers who need unemployment benefits the most don’t receive them," said Owens. "Relief measures are also needed to enable workers who have fled a domestic violence situation or who have accompanied a spouse who has accepted a position in another place to qualify."

In addition, half the states require the unemployed worker to be looking for full-time work even if the worker meets the minimum earnings criteria, was working part-time and is seeking a comparable part-time position.

"These requirements don’t take into account that one out of six workers in the U.S. works part-time today," said Eisenbray. "Women are hard hit because one out of four women works part-time."

In the past Rep. Jim McDermott, D., Wash., has introduced legislation to provide financial incentives to states to institute reforms to their unemployment programs.

He predicts unemployment insurance benefits will receive more attention by Congress and the new administration in 2009.

"Polls show that the economy is the No. 1 issue in the election," said McDermott, who led the House fight to extend jobless benefits and is chair of the Income Security and Family Support Subcommittee of the House Ways and Means Committee. "Providing another extension and modernizing the system will be top priorities; the country can’t let these workers down."

Sharon Johnson is a New York freelance writer.