The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Unemployment Insurance:
Too Little

Feb 1, 2021

The economic crisis, made worse by the COVID pandemic, has thrown tens of millions of workers out of work.

In 2020, the federal government put up some money for unemployment payments in two stimulus bills, and is now discussing a third stimulus bill. But these have been temporary measures, with limited payments that expire quickly.

What this economic crisis has more clearly revealed is that the federal and state unemployment insurance systems never fully protected workers. And these systems have been getting worse for decades.

Unemployment insurance began in the 1930s. When the Great Depression started in 1929, millions of workers were thrown out of their jobs and there were no benefits at all. Unemployed workers began to organize marches, protests and rallies demanding jobs or relief. To quiet the protests, the government set up the first unemployment insurance programs. The federal government passed the Social Security Act in 1935, and states set up their own programs.

But unemployment payments never fully covered workers’ lost wages; benefits were limited to a certain number of weeks; and eligibility requirements excluded many unemployed workers. Then, starting in the 1970s, federal and state governments, run by both Republicans and Democrats, started cutting even these benefits, and making it even harder to qualify.

In 1980, about 43% of laid-off workers in the U.S. received benefits. In 2019, only 27% on average received any benefits! Tight-fisted states include Maryland, only 23% eligible; Indiana, 18%; and Florida, 11%.

And workers get less help. Today the average state unemployment benefit is only about 32% of a worker’s lost wage. And while the average benefit runs out after only 26 weeks, some states only cover 12 weeks!

The neediest workers get the least help—if any. The systems are rigged to disqualify most gig workers, temporary workers, and others in the lowest-paid jobs. Because your benefit is based on your prior wage, not what you need to survive.

The capitalist system can’t provide enough good jobs. It throws people out of work whenever the bosses want. Then it refuses to provide decent life support for the ones laid off. It’s all run in the bosses’ interests.