Four Decades of Declining Federal Leadership in the Federal-State Unemployment Insurance Program

The unemployment insurance (UI) program was established in 1935. Unlike other social insurance programs created by the Social Security Act, it was established as a federal-state program. The federal government initially acted as a strong partner working with state agencies that operate the UI program. Over the past four decades, however, the federal role in the UI program has declined because of reductions in federal resources dedicated to the program and weakening policy leadership and programmatic support. As a result, states operate increasingly divergent UI programs, with many programs providing limited access to the program for experienced unemployed workers who are unemployed through no fault of their own. This paper analyzes the declining role of federal leadership and concludes that it has not been an effective force in maintaining and enhancing a program that should be doing more to ameliorate the effects of economy-wide unemployment and helping individual UI recipients to return to work. If the UI system is going to be effective in the future, especially in future recessions, major strengthening of the UI program is necessary

Informal and Nonstandard Employment in the United States: Implications for Low-Income Working Families

Outlines trends in economic activity outside tax and regulatory policies, current focus on formal employment, and policy options for improving the economic well-being of low-income workers such as expanding access to skills training and childcare support

Options for Unemployment Insurance Structural and Administrative Reform: Proposals and Analysis

The unemployment insurance (UI) program is broken. UI benefits and taxes are out of balance, with benefit payments tending to exceed tax revenues, while the program is unable to provide adequate reemployment services to permanently separated UI recipients. The current crisis in the UI program has been building over the past four decades. Although UI and Social Security were both enacted as part of the Social Security Act, reforms to the programs have diverged sharply. Congress has frequently amended the Social Security program to increase benefits and taxes, and then in 1972 it enacted a permanent annual cost-of-living adjustment (COLA) for inflation. Congress, however, has not enacted a similar COLA for UI. Likewise, Congress has periodically enacted major structural reforms to the Social Security program, while only once since World War II—in 1976—has it enacted a major reform of the UI program. Furthermore, in the absence of federal direction, benefit recipiency, adequacy, and duration have declined in many states because of the lack of political support for enacting adequate benefit and tax provisions. As a result, this paper recommends comprehensive and periodic UI legislative reform, including establishing a process by which UI benefits and taxes are adjusted automatically. To implement such major reform, three options are suggested for administering a reformed UI program: 1) maintaining the current federal-state structure with expanded federal standards with which state UI programs must comply; 2) a single federal program administered by the U.S. Department of Labor and carried out by state UI agencies as agents of the federal government; and 3) a national program that transfers to the Social Security Administration the administration of UI benefits and taxes, as well as the provision of reemployment services

Transforming Unemployment Insurance for the Twenty-First Century: A Comprehensive Guide to Reform

This book proposes options and recommendations for comprehensive reform of the unemployment insurance program that was initiated as a social insurance program by the Social Security Act of 1935. It documents the development of the program and its decline since the 1970s. Reform proposals and recommendations are synthesized from reforms suggested by policy analysts and researchers over many decades.https://research.upjohn.org/up_press/1291/thumbnail.jp

Do Job Search Rules and Reemployment Services Reduce Insured Unemployment?

This paper summarizes state unemployment insurance job search policies based on a recent survey of states by the National Association of State Workforce Agencies. It then reviews research results on the effects of reemployment services on durations of insured unemployment. The paper documents how state administrative practices have changed and questions whether these changes may have affected monitoring of claimant compliance with work search requirements. Since state policies on job search and service referral can affect insured durations of unemployment, these policies can also affect the measured total unemployment rate. This paper reflects the opinions of the authors and does not necessarily reflect the positions or viewpoints of the W.E. Upjohn Institute for Employment Research or the U.S. Department of Labor.unemployment insurance, work test, job search assistance, reemployment, public employment service

Unemployment Compensation and Older Workers

Unemployment compensation in the United States is provided through a federal-state system of unemployment insurance (UI). UI provides temporary partial wage replacement to active job seekers who are involuntarily out of work. For older workers, UI is an important source of income security and a potential influence on work incentives. For many, the transition from full-time work in a career job to retirement is voluntary and orderly. For others, job displacement greatly disrupts plans. The transition often involves many intermediate steps. The chain of transitions may include full- or part-time work on another job which most often is not in the same industry and occupation (a bridge job). There may also be movement between bridge jobs, perhaps back from a bridge job to a career job, and finally a gradual movement into full retirement while out of the labor force. Many issues at the forefront of current UI policy debate are also issues of prime importance to those in the second half of their working life. Issues occur in all the standard areas of UI policy: coverage, eligibility, benefit adequacy, duration of benefits, work incentives, benefit financing, and interaction with other programs. This paper provides a brief background sketch of the labor market situation of older workers to examine issues of prime concern to older workers in these areas of UI policy. Our survey of policy issues suggests that changes in UI rules concerning, initial eligibility, continuing eligibility, wage replacement, and partial benefits should all be examined to evaluate effects on the likely employment patterns of older workers. Particular attention should be given to UI features affecting the choice of self-employment, part-time work, seasonal work, and agricultural jobs. The financing consequences of possible UI program changes should also be estimated, as should the macroeconomic impact of broadening recipiency. UI program features which would promote flexible and extended labor force participation by older workers should also enrich the employment choice environment for other workers. Therefore, it would be useful to examine the impact of such program changes on UI as a built-in stabilizer of aggregate expenditures. While younger workers are usually committed to long-term participation in the labor force, older citizens are often more flexible in choosing to use their time. Worsening labor shortage conditions in the United States mean that efforts to retain older workers in the labor force will intensify. The current and potential influence of UI on the income security and labor force participation of older workers should be well understood.unemployment, insurance, compensation, older, workers, O'Leary, Wandner

Wage Insurance as a Policy Option in the United States

Wage insurance is a program that attempts to help permanently displaced workers transition to employment rapidly, effectively, and equitably. Because displaced workers have been found to suffer substantial earnings losses when they become reemployed, a wage insurance program provides a temporary wage supplement that partially reduces the wage loss experienced by targeted, newly reemployed workers. While participating workers receive a “wage supplement,” the program is called “wage insurance” because of its design as a social insurance program rather than an income transfer program. This paper provides a discussion of the development of wage insurance as a policy option in the United States and proposals that have had varying goals and designs