The President's Jobs Package Will Help Jobless and Stave Off Even Higher Unemployment

Sep 09, 2011


By Neil Ridley

President Obama's  American Jobs Act includes provisions to extend or expand two critical programs - unemployment insurance and work sharing - that support workers struggling in a weak economy characterized by sluggish job growth and high unemployment.  The two measures provide relief for jobless workers and help to prevent unemployment from creeping even higher.

During 2009, unemployment benefits available through federal and state unemployment programs kept more than 3 million people above the official poverty line, according to the Center for Budget and Policy Priorities. The President's job package would extend this assistance currently set to expire at the end of 2011, maintaining a vital lifeline for millions of workers who have lost their jobs through no fault of their own.

The American Jobs Act also proposes an expansion of layoff prevention programs-known as work sharing or short-time compensation-that have gained broad support from businesses, workers and state policymakers. CLASP has been a long-time proponent of work sharing, an option within the federal-state unemployment insurance system that provides employers with an alternative to layoffs. For example, businesses that face a slump in demand can reduce all employees' hours instead of laying off a portion of the workforce. Workers who participate in work sharing are eligible to receive partial UI benefits to help compensate for lost wages. The program is a win-win for businesses, individuals and communities:  businesses retain skilled workers, employees retain their jobs and benefits, and communities minimize the number of unemployed workers.

The President's jobs package is expected to incorporate key elements of the Layoff Prevention Act recently introduced by Sen. Jack Reed (D-RI) and Rep. Rosa DeLauro (D-CT). This bill would update and clarify federal law authorizing state programs, provide incentives to states that adopt and expand work sharing, and offer start-up and implementation assistance. Currently, 22 states plus the District of Columbia have work sharing programs in place, with Maine and Pennsylvania most recently passing bills with overwhelming bipartisan support in 2011.  

Work sharing is an important tool to help businesses and workers, and CLASP urges more states to adopt the program as a way to avoid layoffs.  

With economists predicting that unemployment will remain persistently high for some time still, expanding work sharing and extending unemployment benefits are important steps in responding to the needs of workers in a weak economy.

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