Jan 24, 2014 | PERMALINK »
2014: The Year for Action on State Work Sharing Programs
As 2014 begins, states have a unique opportunity to enact work sharing programs that have the potential to save thousands of jobs. Work sharing, also known as short-time compensation, is a modified form of unemployment insurance (UI) that gives employers the option of reducing employees’ hours instead of cutting their workforce during a business slowdown. For example, a business may reduce all employees’ hours by 20 percent instead of cutting some of its workforce. Workers can then receive pro-rated unemployment benefits that help compensate for reduced work hours.
The recent recession, which triggered huge job losses, spurred interest in work sharing programs as an alternative to layoffs. According to the U.S. Department of Labor, as a result of work sharing, states were able to save nearly 166,000 jobs in 2009—the worst year of the recession. If a program had been in place in 2009 in the remaining 24 states without a work sharing program, up to 70,000 additional workers would have stayed on the job and more employers would have weathered the downturn while retaining qualified workers.
This is a crucial year for action on work sharing because states face an application deadline for federal funding. The 2012 Middle Class Tax Relief and Job Creation Act, which sets aside $100 million in federal grants for work sharing program improvement and outreach to employers, requires states to apply for a grant by December 31, 2014.
 CLASP calculations based on data derived from Katharine G. Abraham and Susan N. Houseman, Short-Time Compensation as a Tool to Mitigate Job Loss? Evidence on the U.S. Experience during the Recent Recession, W.E. Upjohn Institute for Employment Research, 2013 and Sean O’Leary and Paul Miller, Reducing Layoffs: How Work Sharing Can Help Workers and Businesses in West Virginia, West Virginia Center on Budget & Policy, July 2012.
Jan 6, 2014 | PERMALINK »
Resolved for 2014: Renew Jobless Benefits for the Long-Term Unemployed
By Neil Ridley
During the final days of 2013, 1.3 million jobless workers and their families were cut off from federal extended unemployment benefits as a result of congressional inaction. These benefits help long-term unemployed workers make ends meet while they search for work in a tough job market.
If federal benefits are not renewed soon, an additional 1.9 million Americans will lose their coverage over the next six months as they exhaust their state benefits and are then unable to receive federal unemployment insurance. By the end of 2014, 4.9 million workers will be denied benefits and about 3.6 million children will be directly affected by the lapse of benefits available to someone in their household, according to the Council of Economic Advisers and the Department of Labor.
Even though the national unemployment rate has dropped to 7 percent, long-term unemployment remains persistently high—an unfortunate and troubling legacy of the Great Recession. In November 2013, 37 percent of jobless workers—4.1 million people—had been out of work for six months or more. Studies show that the longer workers are unemployed, the more difficult it is for them to find work—with some employers screening out applications from those who have been unemployed for months or years.
Federal unemployment benefits provide a critical lifeline to jobless workers and their families. While the payments do not sustain families at their previous standard of living, they can make the difference between distress and desperation, between cutting back and facing hunger and homelessness. Census data show that unemployment benefits kept 1.7 million people above the poverty line in 2012, even as the number of weeks of federal benefits available to workers declined.
Americans value unemployment insurance and the promise it represents—that those who have lost jobs through no fault of their own and face hard times will not be left out in the cold. A recent poll by Hart Research Associates found that a solid majority of citizens think Congress should act to maintain (55%) rather than cut off (34%) federal extended unemployment benefits. Doing so should be at the very top of the resolution list for Congress as it resumes work this week.
Dec 6, 2013 | PERMALINK »
Despite Improving Employment Picture, Jobless Workers Face a Bleak Holiday with Federal Unemployment Benefits Set to Expire
By Neil Ridley
This time of year, many jobless workers and their families face a difficult and uncertain holiday season. Unless Congress acts soon, 1.3 million workers will lose federal unemployment benefits when the Emergency Unemployment Compensation (EUC) program expires on December 28. Another 850,000 workers will exhaust state unemployment benefits in early 2014 and lose access to federal unemployment assistance.
Workers will lose benefits at a time when the recovery is still slow. The unemployment rate-which the Bureau of Labor Statistics (BLS) today announced had dropped slightly to 7.0 percent-is nearly two full percentage points higher than when the recession started in 2007. Moreover, long-term unemployment remains at record levels compared to previous economic recoveries. In November 2013, 37 percent of jobless workers-4.1 million people-had been out of work for six months or more, according to the BLS. If the nation continues to add jobs at the modest rate shown in the November jobs report, it will take five years to return to pre-recession employment levels.