The Impact of the UIMA

The US economy lost 533,000 jobs in November alone, bringing the unemployment rate to 6.7 percent, and the underemployment rate, which takes into account discoursed workers who have stopped looking for work, and those who are working part time because they cannot get full time hours, to 12.5 percent.

Responding to the growing number of workers who are running out of benefits before they can find work, Congress has acted twice to extend the duration of unemployment benefits. But too many workers, especially low-wage workers, do not get unemployment benefits at all. Only 37 percent of unemployed workers collect unemployment benefits, and low-wage workers are only half as likely to do so.

The Unemployment Insurance Modernization Act would address this problem by providing states with money (7 billion in total) for closing major gaps in the unemployment insurance safety net. If UIMA is enacted, states will qualify for one third of their total funding when they have in place a policy called the “alternative base period,” which counts a worker’s recent earnings when needed for them to qualify for benefits. Over 40 percent of workers who fail to qualify for benefits because of insufficient earnings (whose earnings average just $9.00/hour) end up collecting benefits with the help of the alternative base period. States will get the remaining two–thirds when they enact two of an additional set of reforms that increase access to benefits. All states will immediately qualify for administrative funds under UIMA.

Map and chart courtesy of the National Employment Law Project

Tags: Federal

This entry was posted on Friday, December 19th, 2008 at 1:39 pm and is filed under Decent Work, Economic Security.