Economic Snapshot | Retirement

Extending unemployment insurance benefits

A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for March 6, 2002.

Extending unemployment insurance benefits
Three-and-a-half million people are now receiving unemployment insurance (UI) benefits-over a million more than at the start of this current recession. These sour economic times have resulted in longer periods of unemployment and, thus, an increase in the number of UI recipients who have exhausted their benefits (up 71% from a year ago). As dire as this situation seems, increases in unemployment can be expected in an economic downturn. In fact, they are predictable.

This predictability was the impetus for legislation passed in 1970 extending the length of time a worker may receive UI benefits during a recession from 26 weeks to 39 weeks. But in 1981, Congress changed the rules governing the program, eliminating the national trigger and raising the state triggers by a full percentage point. As a result, only four states met the triggered point in the early 1990s recession, forcing Congress to pass emergency economic legislation in order to extend benefits.

States that have not extended UI benefit criteria, 1981-2002

As shown in the map above, only Washington, Oregon, and Alaska have triggered the extended UI benefits in the latest recession (Washington and Oregon met the trigger point as of the January 6 and Alaska triggered on February 26). Even more telling is that these states only triggered the extended benefits because they adopted an optional trigger tied to the total unemployment rate (6.5%); only eight of the 50 states have adopted this trigger. Thirty-nine states have not met the especially high trigger criteria since 1985, and only nine have triggered the extensions since 1991.

This week’s Snapshot by EPI economist Jeffrey Wenger and Matthew Walters.

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