Congress should include the Unemployment Insurance Modernization Act in the recovery package!
Center for Law and Social Policy (CLASP)
As a parent, you probably have lots of experience dividing things among more than one child. You might give each child the same number of cookies for dessert. Or you might buy a new jacket for the child who has outgrown hers, but not for her brother whose jacket still fits. But you probably wouldn’t buy new shoes for everyone except the one whose only pair is a size too small.
But, astonishingly enough, that’s exactly what the government often does; rather than providing benefits or tax credits to everyone, the government often gives breaks to everyone except the people who need them the most. Many workers assume that if they lose their jobs, they will be eligible to receive unemployment insurance (UI) benefits. But less than 40 percent of all unemployed workers receive UI benefits. Low-wage and part-time workers are twice as likely to become unemployed, but only half as likely to receive UI benefits.
In more than half of the states, workers who are looking for part-time work are denied unemployment benefits just because they are working part-time and not full-time. Most states also deny benefits to workers who had to leave their jobs because of compelling family needs, such as a spouse’s mandatory job transfer, to care for a sick family member, or to avoid domestic violence. As you would expect, women are disproportionately affected by these restrictions.
Similarly, the child tax credit, which is worth up to $1,000 per child for middle class families, was not available to families earning less than $8,500 until Congress acted last fall to make it possible for families earning less than $12,050 a year to get it. . And that change only applies to last year’s taxes unless Congress takes action again to enact the change permanently or to extend it year by year. Very-low income families struggle every day to pay for food, housing, child care, and yes, children’s shoes. But they are excluded from this credit.
Fortunately, there is a chance to fix these inequities as part of the recovery package that Congress is now preparing. We are urging Congress to include the Unemployment Insurance Modernization Act, which would provide states with incentive funds if they adopted a set of reforms that would bring their programs into the modern era and expand access for low-wage and part-time workers. Congress should also lower the threshold at which families begin to be eligible for refundable child tax credits.
These policies aren’t just good for the workers who would directly benefit from them. We’re in a recession because of the sharp drop in the demand for goods and services. One of the best ways to stimulate the economy is to put money in the hands of people who will spend it quickly. Helping people who are living from paycheck to paycheck – or paycheck to unemployment check – is guaranteed to do precisely that. That’s a fair way for government to divide things up -- to help all of us who just want a chance to be part of the American recovery.
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