Acting Labor Secretary Su Highlights Growing Momentum to Fix Unemployment Insurance

A strong unemployment insurance (UI) system is like a sturdy bridge: When workers are out of a job, they should be able to rely on UI benefits for financial support as they move toward new employment opportunities.

Yet too often, UI has been an unsteady bridge riddled with dangerous gaps and potholes. State UI systems serve too few unemployed workers, provide insufficient benefits, and make it difficult for workers to access the support they need. Workers of color are disproportionately shut out of the system, despite consistently experiencing higher unemployment rates because of structural racism in the labor market.

When unemployment soared during the pandemic, workers demanded upgrades to this critical piece of social infrastructure. Just as Congress passed the bipartisan infrastructure law to fix the nation’s crumbling bridges (along with roads, rail lines, water pipes, high-speed internet, and a host of other projects), workers and their allies are now building momentum to permanently modernize and reform unemployment insurance infrastructure as well. This effort also deserves bipartisan support.

Workers and their allies are now building momentum to permanently modernize and reform unemployment insurance.

On January 26, Acting Secretary of Labor Julie Su traveled to Connecticut to highlight much-needed UI system upgrades being made in that state and others across the country. Drawing on $1 billion in funding from the American Rescue Plan Act (ARPA), states are working to enhance access to unemployment benefits, particularly in underserved communities, improve the timely payment of benefits, and make their systems less vulnerable to bad actors.

Among the most promising ARPA-funded UI investments:

• Maine established a Peer Workforce Navigator program to provide culturally competent assistance to laid-off workers who speak an array of different languages;
• Arkansas piloted an alternative to error-prone, privately-controlled identity verification systems by offering public ID verification, including in-person services at U.S. post offices;
• The U.S. Department of Labor sent multi-disciplinary teams of experts into 36 states to provide tailored advice on how to improve their UI systems, including best practices for enhancing equity and access, and provided funds to implement the recommendations.

In Connecticut, Acting Secretary Su joined a panel of state officials, employers, advocates, and labor leaders showcasing Connecticut’s advances in improving UI, including the use of ARPA funds to maintain digital communications with employers, enabling business processes to be streamlined and benefit payments to reach workers more quickly.

Representing the National Employment Law Project at the panel discussion, Unemployment Insurance Campaign Coordinator Alexa Tapia made the case that ARPA-funded projects show that improving workers’ experience with the UI system is possible. She pointed out that a strong UI system not only helps unemployed workers and their families, but also benefits employers, communities, and the economy as a whole, speeding the nation’s recovery from economic downturns.

Yet while the infusion of funding for system upgrades is vitally important, it will not by itself be sufficient to build the UI system workers deserve. In many states, jobless workers, particularly Black, Indigenous, and other workers of color, still struggle to get by on low benefit amounts, lose their benefits long before they can find work, and find themselves excluded when they need UI benefits most. Fortunately, workers and their allies are building power on the legislative front as well.

The recently introduced Unemployment Insurance Modernization and Recession Readiness Act, sponsored by Senators Ron Wyden (D-OR) and Michael Bennet (D-CO) and Representative Don Beyer (D-VA) would address many of the UI system’s deep inadequacies by requiring all states to offer at least 26 weeks of unemployment benefits, raising benefit amounts to replace a greater share of workers’ prior earnings, and expanding eligibility to include many more types of workers, including part-time workers, temp workers, and workers whose earnings fluctuate over time. The bill also establishes a new, federally funded Jobseekers Allowance to support jobless workers who would not otherwise be covered by UI and modernizes the Extended Benefits program that makes additional weeks of unemployment benefits available in times of high unemployment.

In addition, the U.S. Department of Labor should adopt performance standards to hold states accountable for providing equitable access to UI benefits. And states need a robust and reliable stream of federal funding to operate their UI systems at a higher standard, including recruiting and retaining expert professional staff. Yet state legislators don’t need to wait for the federal government to take action: They can and should act independently to improve UI benefit levels, duration, eligibility, and access in their own states.

State legislators don’t need to wait for the federal government to take action: They can and should act independently to improve UI benefit levels, duration, eligibility, and access in their own states.

Acting Secretary of Labor Su taking a stand for UI reform is a powerful signal of growing political will to fix unemployment insurance. Now workers and their allies are calling on Congress and state leaders to take the next steps to transform the UI system.

Watch video of Acting Secretary Su’s UI discussion on the website of the Connecticut Department of Labor.