A bill introduced in Congress last week seeks to update and expand unemployment insurance so that the program better meets the needs of the modern workforce and is ready to respond should America face a future recession.
The Unemployment Insurance Modernization and Recession Readiness Act (S. 130) would modernize the program in several ways.
First, it would update the federal-state Extended Benefits program so that it will automatically add additional weeks of benefits when unemployment rises. It would also establish new requirements for state unemployment programs to ensure that benefits are adequate to support workers through job loss and that more workers are covered when they lose their job. This would include requiring that all states offer 26 weeks of benefits, replace 75 percent of workers’ wages, cover part-time workers, and pay workers for their first week of unemployment—the “waiting week.”
In addition, it would create new permanent federal programs for unemployed workers, including a $250 per week Jobseeker Allowance that would be available to any unemployed workers not covered by the traditional unemployment insurance system, such as self-employed workers and new entrants to the labor force.
Further, it would include an additional $25 weekly federal allowance for each dependent an unemployed worker has and provide federal funding to increase unemployed workers’ wage replacement rates to 100 percent during major disasters or public health emergencies.
“The past few years have clearly shown that our unemployment insurance system is broken and doesn’t meet workers’ needs. After decades of sabotage and neglect, this essential social safety net desperately needs an update,” Sen. Ron Wyden (D-OR), chair of the Senate Finance Committee and one of the billʻs lead sponsors, said. “By bringing unemployment insurance into the 21st century now, we will ensure American workers who become unemployed by no fault of their own will have the help they need as they get back on their feet – and will make sure we’re ready if and when the next economic downturn hits, whether it be years from now or decades from now.”
The bill was also sponsored by U.S. Sen. Michael Bennet (D-CO).
“Too many Americans struggle to access essential unemployment benefits as they navigate a patchwork of outdated state systems. Others – often low-wage workers, workers of color, caregivers, and self-employed workers – receive no protection when they lose a job,” Bennet said.
A companion bill, H.R. 6071) was introduced in the House by U.S. Rep. Don Beyer (D-VA).
“The pandemic and ensuing economic downturn revealed both the importance of our unemployment insurance system and the desperate need for its expansion and modernization,” Beyer said. “The inadequacy of the system forced Congress to step in and temporarily expand the program, but without permanent reform we are just as unprepared for a major crisis as we were before the pandemic.”
The bill has the support of several organizations, including the National Employment Law Project, the Century Foundation, and the AFL-CIO.