Unemployment extension may be too little, too late

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

Snapshot for March 13, 2002.

Unemployment extension may be too little, too late
A common misconception about unemployment insurance (UI) programs is that all workers are eligible for 26 weeks of benefits. As demonstrated by the chart below, only eight states have a guaranteed 26 weeks of eligibility regardless of earnings; the rest of the states calculate the duration based upon either the total amount of wages earned or the distribution of earnings in the qualifying year. In fact, in 13 states, a UI recipient might be eligible for less than three months of benefits.

[Click here to view or download a full-size version of this figure in Acrobat / PDF format]

Approximately 43% of all UI recipients exhaust their benefits before 26 weeks. These recipients are most likely to be unemployed low-wage earners, new labor force entrants, or eligible part-time workers. In five states, even a full-time, full-year minimum wage earner fails to qualify for 26 weeks.

The new stimulus bill just signed into law by President Bush takes a number of positive steps toward mitigating the effects of the recession on the unemployed. One of those steps is to extend the duration of benefits by half. For the handful of states with uniform 26-week eligibility periods, this extension works out to an extra 13 weeks of coverage. Most UI recipients, however, will see far shorter extensions. In 32 states, those UI recipients who only qualify for the minimum number of weeks in their state will receive less than eight weeks of extended benefits; in five states the federal extension will only provide a month or less of extra benefits. Unemployed workers in 35 states, even after the extensions, will still receive less than 26 weeks of benefits. Although some extension may be better than none, it is simply not enough to tide these unemployed workers over during a recession.

This week's Snapshot by EPI economist Jeffrey Wenger and research assistant Matthew Walters.

Check out the archive for past Economic Snapshots.