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Shredded safety net: only 43% of jobless get aid


Cast Adrift: America’s Jobless Cope With Shredded Safety Net

Saturday
March 20
9:21 am
 

By Roger Bybee

"We haven’t seen anything like this before," economist Heidi Shierholz, of the Economic Policy Institute, recently remarked. "[A] really deep recession combined with a really extended period, maybe as much as eight years…of highly elevated unemployment."

Nor have we seen a period in which unemployment benefits cover such a small share of the jobless, imposing unbearable stress levels for the unemployed and their families.

A 2009 study of 1,200 jobless workers conducted by scholars at Rutgers, called the The Anguish of Unemployment, showed that just under half—43%—of the unemployed actually received unemployment benefits during the previous year. That "broadly reflects the national average," as Business Week put it. And 84% of the workers received no severance package or other compensation.

DESPITE AMERICA’S RICHES, A SHREDDED SAFETY NET

The absence of unemployment benefits has two obvious impacts. First, the economy loses consumer spending needed to re-ignite America’s sputtering economy and get us beyond a "jobless recovery. But as Robert Reich points out, a complacent Cororate America is finding consumers overseas, as he points out in his article "The Sham Recovery." Worse, it deprives workers and their families of both income and independence.

They are forced to wait in food lines, use free healthcare clinics, and,
too often, fight a prolonged but futile battle to hang on to their homes and avoid foreclosure.

What is most stunning  is how the national unemployment insurance safety net developed in 1935 has been so shredded, even as the nation has grown so much richer and safety nets have been strengthened in other advanced nations.

During the 1975 recession, for example, roughly two-thirds of the unemployed in the U.S. were covered by unemployment insurance. But that percentage has continued to shrink drastically, reports the National Employment Law Center:

Over recent decades, unemployment insurance (UI) programs have paid UI benefits to fewer unemployed workers in part because UI eligibility rules have not kept pace with changes in the labor market.

In 2002, about 45 percent of all unemployed workers collected unemployment insurance benefits. This number is smaller for low-wage workers.

One major step backward occurred during the Reagan recession of the early 1980s, when Republicans sharply cut back on eligibility for unemployment benefits. The National Association of Manufacturers was delighted with the cutbacks in eligibility, crowing that under the old rules, “there was no incentive to go back to work under that program.”

THE ‘CASUALIZATION’ OF WORK

The de-industrialization of the nation, and workers’ resulting reliance on unstable service-sector work, has further undermined coverage. A 2006 report by the Government Accountability Office attributes the declining support for unemployed workers to the loss of large-scale factories and major drop in unionization—both of which facilitated communication among workers about the benefits and rights available to the jobless—and
increasing "casualization" (part-time, temporary, and project-based employment) of the workforce.

With a growing share of the workforce tethered only loosely to employers and job-based rights, these workers are often left out in the cold when it comes to income support when they are unemployed. Meanwhile, even those workers eligible for unemployment benefits face long delays because of inadequate staffing at the state level.

Olga Pierce, writing for ProPublica, notes how states like Virginia have been unable to keep pace with the fast-rising demand for unemployment benefits:

As a result, the state, which is required by federal guidelines to pay 87 percent of claims within 14 days of approval, paid only 74 percent on time…. Workers in the state who chose to appeal a denied claim had to wait even longer: only about 4.3 percent of cases received a hearing with 30 days in December, far short of the mandated 80 percent.

Couple that with other problems states are facing — like online claim filing systems that are collapsing because of volume, hotlines that are busy and offices with long lines — and you have droves of workers who qualify for help but must cope with collection agencies, cut-off utilities and eviction while they wait.

TOLL ON PHYSICAL, MENTAL HEALTH

All of these pressures on jobless workers take a devastating physical toll on their pysical health (as this blog has outlined here, here and here ). It also means a deep erosion of self-esteem for those whose jobs have been shifted to Mexico, China and other employer paradises.

To offer badly-needed assistance to the unemployed and their families, labor has launched two vital initiatives:

  • The AFL-CIO website offers the "Unemployment Lifeline," informing the unemployed of their rights and providing links to local services for food, health, counseling, and housing assistance.
  • The International Association of the Machinists is actively promoting the Union of the Unemployed, which is crucial both for providing social support for the jobless—who often feel  both isolated and reluctant to see other people—and an advocacy organization to fight for decent benefits and an expansive job-creation program. ("U-Cubed," as the organization is known, was the subject of a recent profile by Micah Williams in these pages.)                                                          

Labor’s programs could not be arriving at a more urgent time for the millions of jobless Americans. As Business Week reported on the Rutgers study:

We don’t tend to look at unemployment as having a psychological effect, just an economic one," co-author Carl Van Horn, a Rutgers professor of public policy, said on Sept. 2 in an interview. Van Horn warns of a silent mental health epidemic, as the jobless face financial, emotional, and social consequences of being unemployed.

"For many people, being unemployed is embarrassing. They’re not interested in talking about it and think of it as their fault," he says. "As a researcher for 35 years, I’m struck by the breadth and depth of the psychological impacts."

Posted by Roger Bybee

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