About 3 million workers filed unemployment claims last week, and 14 million workers are expected to be out of work by June. Large numbers of those who lose their jobs will be low-wage workers, and unfortunately many will be ineligible for unemployment compensation under current overly restrictive eligibility rules.

Federal and state legislators, however, have the power to act and come to the aid of these vulnerable workers. The Coronavirus Aid, Relief and Economic Security (CARES) Act—which has passed the Senate by unanimous consent and is moving to the House today—has notable limitations, but would greatly expand eligibility for unemployment insurance.

The expansion is necessary and important because unemployment benefits are generally limited to those who had high enough earnings when they were working. But low-wage workers experience higher rates of joblessness, lowering their baseline earnings and making them less eligible to collect UI benefits.

Figure A shows that unemployment rates are substantially higher for low-wage workers, defined as those workers who earn less than their state’s 30th percentile wage.

During the Great Recession, nearly one out of five workers who had earned low wages also experienced some unemployment. In contrast, unemployment rates were only about half as high for the rest of the workforce who earned more than their state’s 30th percentile wage. Given the toll on the service industry during the current pandemic, we should expect unemployment to skyrocket for low-wage workers.

Although low-wage workers experience higher rates of unemployment, they are less likely to receive unemployment benefits.

Figure B shows that during the depths of the Great Recession, only about one-quarter of low-wage workers received unemployment benefits when they became unemployed. In contrast, the UI recipiency rate was nearly twice as high for workers who earned above the 30th percentile wage and became unemployed.

One reason low-wage workers often do not receive benefits is that they are ineligible because of low hours worked or not enough earnings during the times they do work (e.g., fast-food workers or retail clerks).

Current proposals in Congress can help by providing compensation even to those workers who fail to normally qualify for benefits because of these restrictions. Specifically, the CARES Act expands eligibility for workers specifically affected by COVID-19 either through diagnosis, sickness, caregiving responsibilities, the need to quit, or because their place of employment closes as a result of COVID-19. In addition, it expands eligibility to workers who have historically not been able to take advantage of unemployment insurance benefits, such as those who are self-employed, are seeking part-time work, or do not have sufficient work history to qualify for unemployment insurance.

These new provisions will be very helpful for the lowest-wage workers, who often do not qualify due to their low earnings or limited work histories. The pandemic-driven recession will be hardest on low-wage workers throughout the country—millions of workers in service industries, including those in retail, restaurants, hotels, and transportation are and will continue to face losses in hours and layoffs. Passage of the CARES Act is desperately needed and will certainly lead to greater numbers of previously disenfranchised low-wage workers being eligible to receive unemployment insurance.

The provisions in the CARES Act that expand unemployment insurance as well as provide cash assistance are welcome, though they should not be the last effort to fill in the gaps for workers, their families, and other vulnerable populations.