Too Many Low-Wage Workers are Ineligible for UI Benefits

Mar 11, 2013

By Elizabeth Lower-Basch and Lavanya Mohan

Last month, North Carolina enacted a law that cuts benefits for jobless workers by reducing the maximum number of weeks for benefits and capping the maximum weekly unemployment insurance (UI) benefit. As it is, North Carolina has the second highest earnings qualification in the nation, requiring claimants to have earned at least $4,706 of base wages over two quarters in a year to receive UI benefits. As a result of these cuts, 170,000 unemployed workers will lose federal and state unemployment benefits.

State Comparison of UI Monetary Eligibility

(in base-year dollar requirements)

 
 

Source: Policy Matters Ohio

Even before these cuts, North Carolina had among the most restrictive UI programs in the nation.  Each state sets its own unemployment benefits standards, most requiring UI applicants to earn a minimum amount and work a minimum number of hours in a calendar quarter or year. A recent study by Policy Matters Ohio shows that several states, including North Carolina, Arkansas and Pennsylvania, have raised earning requirements to receive UI benefits.  Such high monetary eligibility standards make it harder for low-income jobless workers, who already have the hardest time making ends meet, to receive UI benefits.  They join states such as Washington and Ohio, which already had very high earnings requirements. 

As an example, if a minimum wage worker from Ohio was employed for 30 hours a week (well above the 20 hour minimum eligibility) for more than 20 weeks of work, he or she would still not qualify for UI benefits, due to the state's strict minimum $230 per week average earning standard.  As a result, 39 percent of unemployed workers in Ohio receive federal and state UI benefits (less than 25 percent are eligible for state UI benefits), compared to a national average of just under 50 percent.

As a result of state monetary eligibility requirements, low-wage workers are less likely to receive UI benefits when unemployed.  They may also be denied benefits for "non-monetary" eligibility reasons that are related to the nature of the work or their personal circumstances.  For example, if a worker cannot arrange childcare for variable shifts, she may be forced to quit her job, and therefore be denied UI benefits. 

CLASP urges state legislatures to reject proposed policies that create further barriers for low-income jobless workers. Instead, CLASP encourages states to focus on fair UI standards and programs that help jobless workers - not punish them for earning a minimum wage.

 

 

site by Trilogy Interactive