For Immediate Release: April 03, 2009

Rising Unemployment Calls for Swift Use of Existing Policy Tools, and New Policy Solutions

(Washington, D.C.) The nation's continually rising unemployment rate underscores the urgent need for states to take full advantage of provisions in the American Recovery and Reinvestment Act that provide relief for workers facing economic distress, and it calls for making better use of policy solutions designed to help workers through tough economic times, the Center for Law and Social Policy (CLASP) said today. 

"Far too many workers and their families are losing jobs and needed income," said Evelyn Ganzglass, director of Workforce Development at CLASP. "It's no secret that mounting job losses have serious economic consequences for workers and their families and for the economy. Workers need swift action from state governments, including implementing recovery act provisions that give more workers access to unemployment insurance and extend unemployment benefits. Furthermore, policymakers at all levels of government must enact long-term solutions that will ensure workers have the skills and supports they need in the future to weather economic downturns."

The national unemployment rate rose to 8.5 percent in March, the worst since 1983.  The rate is even worse for workers without a high school diploma (15.5 percent or 13.3 percent, seasonally adjusted), for African Americans (13.3 percent) and for Latinos (11.4 percent).   A fuller measure of under- and unemployment rose to 15.6 percent.  This includes groups such as discouraged workers who have given up looking for jobs and those who are working part-time because they cannot find full-time employment.

While the American Recovery and Reinvestment Act temporarily increased unemployment benefits and extended benefits for many workers, many states must still adopt laws that extend coverage to more workers to receive full funding under the modernization provisions.  Some of the hardest hit states must also modify state laws to qualify for the full extension of benefits for which they are eligible.

President Obama's budget proposal also called for changes to improve the unemployment insurance program and make it more responsive to future downturns.

Further, work sharing, an underused Unemployment Insurance provision, could help employers avoid layoffs. Work sharing programs allow employers to temporarily cut costs by reducing the number of regularly scheduled work hours for all employees or for all employees in a unit that is experiencing a decline in demand for goods or services. For example, through work sharing, an employer could reduce hours for all workers by 20 percent instead of laying off 20 percent of its workforce. In a typical state program, employees work four days a week, receive Unemployment Insurance benefits for the fifth day and retain employer-provided health and retirement benefits. 

Currently, only 17 states have work sharing programs. Workers filing claims through work sharing have increased multi-fold in many of the states that use this program.

"During this tough economic time, we need policy solutions that work for workers," Ganzglass said. "Work sharing can help employees keep their jobs and their benefits, and the partial unemployment benefits available under these programs can help offset the loss of wages."

For more information on work sharing, go to: http://www.clasp.org/publications/layoffsfortoughtimespb.pdf

To view CLASP's summary of the American Recovery and Reinvestment Act, visit: http://www.clasp.org/publications/preliminarysummaryofarra021309.pdf

To view an overview of choices that states can make to improve income support using the TANF and Unemployment Insurance provisions of the Recovery Act, see: http://www.clasp.org/publications/oppwomenandchild.pdf

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CLASP develops and advocates for policies at the federal, state and local levels that improve the lives of low-income people. We focus on policies that strengthen families and create pathways to education and work. Through careful research and analysis and effective advocacy, we develop and promote new ideas, mobilize others, and directly assist governments and advocates to put in place successful strategies that deliver results that matter to people across America.

 

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