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Commentary

Expand unemployment insurance now

Marketplace Staff Jul 9, 2008
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Commentary

Expand unemployment insurance now

Marketplace Staff Jul 9, 2008
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TEXT OF COMMENTARY

Scott Jagow: So far, the job market has held up OK, but I just have this feeling it’s starting to sink. The last few days, we’ve seen several announcements of major lay-offs. At the German company Siemens, American Airlines, Indy Mac Bancorp, GM.
Commentator Robert Reich says people who lose their jobs and qualify unemployment benefits are the lucky ones.


Robert Reich: Congress has just extended unemployment benefits 13 additional weeks, over and above the 26 weeks normally provided. That’s good as far as it goes. But most people who lose their job these days don’t qualify for any unemployment benefits at all.

How can this be? Well, in order to be eligible, most states require you to have been working in the job you lost full-time, and for a certain number of years.

These requirements made sense decades ago, when labor markets were far more stable — when most working people stayed in the same full-time job for years, and only lost it temporarily during the downdraft of a recession, picking it up again when the economy rebounded. And back then, one full-time breadwinner could keep a family whole. In those days, unemployment insurance counter-balanced recessions by keeping money in the pockets of working families.

But nothing is stable about today’s labor market. Every time the economy sinks, employers fire workers permanently. Even when the economy is doing fine, pink slips proliferate — although it’s easier then to find a new job. All of which means a growing fraction of the labor force is in a job only a few years.

Meanwhile, full-time jobs are vanishing. More companies are contracting out their work. As a result, more people are doing several part-time jobs, or are self-employed. They’re also more likely to be part of a couple whose family depends on two sets of paychecks.

So when times get tough, as they are now, and people lose a job after having it for only a few years or lose their part-time job or lose their client, or when one member of a couple loses earnings, a family can be in real trouble. And there are no unemployment benefits — not even partial benefits — to help them out. Or to help counter-balance the economy as a whole.

It’s a disgrace that most Americans who lose their jobs don’t qualify for unemployment insurance. Congress should expand coverage so a majority of American families have some security in these perilous times.

Jagow: Robert Reich teaches public policy at the University of California at Berkeley.

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