Unemployment Insurance in US – The proportion of jobless workers receiving benefits fell to a record low of 23.1 percent in December 2014

The Great Recession and its aftermath created severe challenges for unemployment insurance (UI) programs in the United States and for jobless workers relying upon them. In this briefing paper, we show that state UI programs are failing their critical goals of income replacement and supporting economic growth. The proportion of jobless workers receiving benefits from state programs, referred to as the UI recipiency rate, fell to 23.1 percent in December 2014—below the pre-Great Recession record low of 25.0 percent in September 1984.

Due to the expiration of federal emergency unemployment benefits at the end of 2013, jobless individuals were solely dependent upon state UI programs for support in 2014. While state UI benefit recipiency overall has declined due to the improving economy, these state programs in many cases failed to assist jobless workers. This brief focuses special attention on those states that have cut their potential available weeks of UI benefits to below the long-accepted norm of 26 weeks. Because state UI programs are mainly designed to address short-term unemployment, we focus our analysis on the short-term recipiency rate, which excludes people who have been unemployed for 27 weeks or more from the proportion of jobless workers receiving benefits from state programs.

The key findings of this brief include the following:

• Since 2011, nine states have cut maximum durations of unemployment benefit recipiency: Arkansas, Florida, Georgia, Illinois, Kansas, Michigan, Missouri, North Carolina, and South Carolina.
• Eight of these states have experienced faster-than-average declines in their short-term recipiency rates. The exception is Illinois, which cut available benefits by only one week for a single year (to 25 weeks for 2012). In four of the states (Florida, Georgia, North Carolina, and South Carolina), short-term recipiency rates declined by between 1.7 and 8.6 times as much as the U.S. average decline.
• By cutting available weeks of benefits, these eight states’ already-low short-term recipiency rates fell even further below the recipiency rates of all other states. In 2014, Florida, Georgia, North Carolina, and South Carolina ranked in the bottom eight states in short-term (less than 26 weeks) recipiency rates.
• In North Carolina, one of the states with the most severe cuts (cutting the duration of benefits from 26 weeks in 2013 to 14 weeks in 2014 as well as cutting the level of weekly benefit amounts), the decline in the short-term recipiency rate was 14.4 percentage points (or 8.6 times) greater than the nation’s average decline since the cuts went into effect in July 2013.
• Expanding our analysis to the regular (versus short-term) UI recipiency rate, we find that jobless people exhausting state UI benefits in 2014 had less protection from income loss than any cohort of jobless individuals exhausting state UI benefits over the last few decades.

Chosen excerpts by Job Market Monitor. Read the whole story at How Low Can We Go? State Unemployment Insurance Programs Exclude Record Numbers of Jobless Workers | Economic Policy Institute.