Unemployment Insurance Overview
Background:
Unemployment Insurance (UI) was created in 1935 with male "breadwinner" in mind and does not reflect changes in the workforce - i.e. women workers, single family-heads with dependents, childcare and transportation challenges, the desire on the part of some workers to work less than full-time to more successfully juggle work and domestic responsibilities, etc.
Many women workers who didn't qualify (or didn't even consider UI as a possibility) for UI benefits relied on welfare as a "poor woman's unemployment insurance." However, the new limits on welfare and other restraints on accessing welfare benefits mean that these women are probably no longer able to turn to welfare for emergency income support.
Why should welfare advocates be concerned about UI policy?
We are at a critical time to talk about expanding UI for low-wage workers (the economy is strong, Wisconsin's UI trust fund is financially very sound, we have thousands of low-skilled workers moving into the labor market as a result of W-2 who are vulnerable to layoffs and are known to have sporadic work histories and low wage levels). We need to pose the question of whether the unemployment system will respond to the challenge of welfare reform and reward work by finally addressing the basic inequities of the unemployment program. Due to welfare reform, the UI system is now essentially the only safety net left for low-wage workers.
The Problem:
In 1998 in Wisconsin, 55 percent of the total unemployed population received unemployment insurance.
Women are less likely then men to receive UI benefits — 80 of unemployed women in a study done by the Institute for Women's Policy Research (IWPR) failed to meet eligibility criteria.
Mothers who receive welfare have been shown to have substantial labor participation, but their work patterns tend to be sporadic and their wages low. With low-wage levels and inconsistent work, many of these women fail to meet the UI system's eligibility standards and are disqualified from receiving UI benefits.
Part-time workers are almost four times less likely than full-time workers to receive UI benefits — in Wisconsin, those wishing to only work part-time are not eligible for benefits.
The UI system has not adapted to changes in the structure of the workplace and the family.
Many working people with significant work activity are ineligible for UI benefits even when they lose their jobs for reasons other than misconduct. For example, women leaving the job because childcare arrangements fell through, or because their spouse is relocating for a new job, or to care for a sick child/spouse, are not considered eligible for UI benefits.
Who makes changes to the UI system in Wisconsin?
In Wisconsin, all reforms to the UI system are made by the Wisconsin UI Advisory Council, which is composed of equal appointed representatives of both the business and labor communities. A package of reforms is suggested by this Advisory Council and, historically, the legislature and, subsequently, the Governor, accept these reforms without amendment. Thus, unlike many other states, the Advisory Council has real authority over UI changes and the process of Ul reform is significantly easier than states where advocates must go through the normal legislative process.
So what should advocates focus on to improve the UI system in Wisconsin?
1. Adopt an Alternative Base Period (ABP):
Only earnings during a specified "base period" count toward UI eligibility. This base period is usually defined as the first four of five completed, employed quarters prior to the quarter when the claim is filed. This disqualifies many workers whose earnings are highest just prior to losing their jobs. If a welfare recipient finds her first job, works several weeks or even months, and then loses the job, she may not be eligible for UI because earnings over a period of as many as 24 weeks may not be counted toward eligibility under this base period.
This modification for calculating UI benefits counts the last, or "lag" quarter earnings so that workers with irregular earning patterns can receive benefits. Maine, Massachusetts, Michigan, New Hampshire, North Carolina, New York, New Jersey, Ohio, Rhode Island, Vermont, and Washington have already passed the ABP.
Wisconsin's UI Advisory Council approved an ABP on 9/17/99 and the measure was eventually passed by the Wisconsin State Legislature and signed into law by Governor Thompson. This new provision will allow potentially thousands of Wisconsin workers to receive U I benefits who previously would not have qualified.
2. Recognize Compelling Personal Circumstances as Good Cause Reasons for Leaving Employment
With only a few exceptions, when a worker leaves a job for a reason not attributable to the employer, the worker is disqualified from UI. These are often the types of reasons that plague low-wage workers, especially single mothers, such as failed child care, unreliable transportation, out-of-town emergencies, sick children/spouse, etc.
The National Commission for Employment Policy estimated that 17 percent of women, compared to just over 3 percent of men, leave their jobs due to individual and family responsibilities. These responsibilities are currently not recognized as good cause reasons for leaving employment.
To fully recognize the realities faced by women juggling work and domestic responsibilities, this provision should be broadened so that those who leave work for these "compelling personal circumstances" can receive UI benefits - care-giving, marital obligations, etc.
A provision was included (and passed!) in the UI Advisory Council's 1999 bill that opens the door to addressing this issue. Imagine a situation where someone is working, for example, second shift and has stable solid childcare arrangements. The employer decides to adjust the worker's schedule to third shift hours, childcare arrangements no longer are possible and the worker is forced to quit the job. Previously, the worker in this scenario would not have qualified for UI benefits. The law change would allow the worker to be eligible for UI benefits on the grounds that the loss of childcare and subsequent leaving of employment were a result of the employer's actions. This represents a dramatic shift in mentality (recognizing that childcare is critical to a worker's job stability and that leaving a job for childcare-related reasons can in fact be counted as "good cause") and allows for the possibility of extending benefits to others juggling work and domestic responsibilities.
Furthermore, the UI Advisory Council's 1999 bill created an exemption for victims of domestic abuse. If someone voluntarily leaves employment because of domestic violence, safety concerns, or harassment to herself or her children, that will now be considered a "good cause" reason for leaving work and she will likely qualify for UI benefits.
3. Allow Those Seeking Part-Time Employment to Meet the State's Work Search Requirements
Wisconsin UI law requires claimants be "able and available" for full-time work-- essentially ignoring the situations of claimants who must balance their employment with their care-giving responsibilities. A few other states do allow part-time workers to qualify for benefits, particularly if they can demonstrate that there is labor market demand for part-time workers and if the worker has a history of working less than full-time.
As part of its 1999 package of recommendations, Wisconsin's Advisory Council created a study group to further examine whether or not part-time workers should have access to UI benefits. The Advisory Council has indicated that they are open to discussing this issue in 2000-2001 and positive action here could impact thousands of workers throughout the state who are seeking only part-time work and currently are not eligible for benefits should they lose their jobs.
4. Offer Dependent Allowances
Thirteen states currently provide additional allowances to unemployed workers with dependents. These allowances, generally no more than $25/week per dependent, supplement weekly UI benefit levels and would greatly reduce the economic hardship on individuals with dependents and would be a fair reflection of their increased spending on necessities.
This issue was discussed with Wisconsin's UI Advisory Council members, who were not particularly receptive to the idea of adopting dependent allowances. Their objections centered primarily around the cost of such allowances. However, these allowances are supported by both the National AFL-CIO and the National Employment Law Project, and advocates should not shy away from bringing up this issue and continuing to argue that workers with dependents should receive more income while they are unemployed than workers without dependents.