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News from EPI Cuts to State Unemployment Insurance Programs Have Left a Record Number of Jobless Workers Behind

A record-low number of jobless workers received unemployment insurance (UI) benefits in 2014, according to a new report by attorney Rick McHugh and EPI research assistant Will Kimball. In How Low Can We Go? State Unemployment Insurance Programs Exclude Record Numbers of Jobless Workers, McHugh and Kimball calculate the proportion of jobless workers receiving benefits from UI programs—referred to as the UI recipiency rate—in each state, and find that state UI programs have fallen short in the aftermath of the Great Recession.

After the expiration of federal emergency unemployment benefits at the end of 2013, jobless individuals were solely dependent upon state UI programs for support. At the same time, nine states cut the length of time that jobless workers could receive benefits below the long-accepted norm of 26 weeks. In eight of these states, the proportion of workers protected by UI fell more than it did nationally.

“A smaller percentage of unemployed workers is receiving unemployment benefits than ever before,” said McHugh. “Because there were no federal benefit extensions in 2014, workers who exhausted state benefits had less protection from the harm caused by unemployment than any similar cohort of jobless workers since the late 1950s—when Congress first began benefit extensions.”

The national UI recipiency rate fell to 23.1 percent in December 2014—below the previous record-low level of 25.0 percent in September 1984. While the total number of workers receiving UI benefits declined partly due to the improving economy, the fact that recipiency rate fell more drastically in the eight states that cut benefits is evidence that these states are failing to assist jobless workers.

“The point of unemployment insurance is to help workers who are out of work through no fault of their own, and give them a chance to support themselves and their families while they look for another job.” said Kimball. “When states cut the generosity and length that benefits were available, they failed the workers who need help the most.”

Since 2011, nine states—Arkansas, Florida, Georgia, Illinois, Kansas, Michigan, Missouri, North Carolina, and South Carolina—have cut the maximum length of time that jobless workers were eligible for unemployment benefits. Eight of these states experienced faster-than-average declines in their UI recipiency rates. The exception was Illinois, which cut available benefits by only one week for a single year (to 25 weeks for 2012). Florida, Georgia, North Carolina, and South Carolina had the most severe cuts to UI benefits. Short-term recipiency in these states rates declined by between 1.7 and 8.6 times as much as the U.S. average decline. In 2014, they ranked in the bottom eight states in the number of jobless workers who received UI benefits.

North Carolina notably cut not just the duration—from 26 weeks in 2013 to 14 weeks in 2014—but also the dollar amount of weekly benefits. In North Carolina, the recipiency rate fell by 16.3 percentage points, 8.6 times more than the overall national decline, since the cuts went into effect.