House Bill Cuts Federal UI Benefits, Stigmatizes Joblessness, Penalizes Workers with Least Education

Dec 12, 2011

Dec. 13, 2011 Update: The House passed the so-called Middle Class Tax Relief and Job Creation Act of 2011 today.

The House of Representatives today is scheduled to review a bill introduced by Rep. Dave Camp (R-MI) that puts ideology before the broader needs of the public. While the bill extends the payroll tax deduction, it limits the availability of federally funded unemployment assistance, includes punitive provisions for the least skilled jobless workers and inexplicably ties needed UI benefits

Current law provides federal unemployment insurance benefits for up to 99 weeks, depending on the pervasiveness of unemployment in the state. The so-called Middle Class Tax Relief and Job Creation Act of 2011 reduces this to a maximum of 59 weeks in hardest hit states.  Such a move fails to consider the weak jobs market and the harm reducing unemployment benefits would inflict on families and the national and local economies. Unemployment has been above 8 percent since April 2009, and the percent (43 percent in November 2011) of unemployed workers who have been without a job for six months or more has remained at record levels for 31 months.

"Reducing workers' benefits does not solve the long-term unemployment crisis," said Neil Ridley, a CLASP senior policy analyst. "It is illogical to reduce benefits at a time when long-term unemployment has broken records and is setting new ones."

The bill also includes provisions that would reduce access to and stigmatize those who receive unemployment insurance. It denies unemployment insurance benefits to the most vulnerable workers, those without a high school diploma or GED, if they can't demonstrate they are enrolled in a program leading to a credential. Workers with less than a high school diploma are unemployed at significantly higher rates than workers with a bachelor's degree (13.2 percent v. 4.4 percent).

"There certainly is an argument to be made that more workers need to complete high school and earn postsecondary credentials," Ridley said. "But establishing a blanket policy that denies unemployment insurance benefits to low-skill workers, who have lost their jobs and would otherwise be eligible, just because they don't have a high school diploma and without ensuring they have access to education opportunities is punitive and misguided."

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