Nam Y. Huh/AP Photo
A construction worker secures sheathing at a residential building site in Mount Prospect, Illinois, March 18, 2024.
The economic impact on workers who lose their jobs is devastating, and the emotional toll is profound. This was the experience of countless Americans when employers shed 22 million jobs at the onset of the COVID-19 pandemic.
Unemployment insurance (UI), temporarily expanded by Congress across two administrations, carried the nation through this crisis. But the tatters in the safety net were exposed for all to see and are in desperate need of repair.
I have likened the unemployment system to a house with a leaky roof. The holes in it have been around for decades. When unemployment is low, the leaks are manageable, but in a storm, the inadequacy of our existing system is glaring. But once the storm subsides, so do calls for fixing the roof.
We can’t keep making the same costly mistake.
Under President Biden’s leadership, the United States has added nearly 16 million jobs, and average unemployment has been lower than during any administration in 50 years. We must make the repairs before the next storm, to build a UI system that will serve the American people when it is most needed.
When President Biden came into office, he signed the American Rescue Plan Act. That law provided $1 billion for the Department of Labor to help states modernize technology and operations in three key areas: timely benefit delivery, equitable access, and fraud prevention. The improvements we’ve made with this one-time investment demonstrate what’s possible when the states and the department have the resources to work together.
The Department of Labor’s plan details the policy and technological changes needed to ensure that states can respond to future economic crises.
Earlier this year, I joined Gov. Phil Murphy of New Jersey at an event celebrating the launch of a new online application system that is shaving hours off the cumbersome process of filing an unemployment claim. With the department’s support, the state built this user-friendly application, using an agile approach that is delivering immediate results, while continuing the work to replace the state’s underlying system, which is over 30 years old. Other states can adopt New Jersey’s application and modify it for their own use, which allows states to make critical improvements that workers can feel today.
We’re also protecting the unemployment system from increased risks of fraud during emergencies, without compromising access to benefits. In Maui, after the devastating wildfires last year, the department connected Hawaii to digital and in-person identity verification services, including through retail clerks at U.S. Postal Service locations. These services only exist because of our concerted efforts to build a better system. And it was available when the people of Hawaii needed it most, because we built it before the fire started.
Other states have deployed the first-of-its-kind “Navigator” pilot program, which enables them to partner with community-based organizations to reach populations traditionally left behind by UI. That pilot program is using innovative strategies, like locating a workforce resource expert in a neighborhood grocery store in a predominantly African American community in North Tulsa, Oklahoma. Even after the CARES Act of 2020 expanded UI benefits to those traditionally excluded, disparities between Black and white workers persisted. Hopefully, this work means that won’t continue to happen.
The Department of Labor has developed a comprehensive plan to transform the UI system. First and foremost, the plan starts by calling for adequate funding for state programs with grants that match the actual cost of running the UI system today. It also details the policy and technological changes needed to ensure that states can respond to future economic crises, and pay benefits accurately and timely to all eligible individuals who experience a loss of work.
In its current form, unemployment insurance is unable to deliver the safety net that America needs. Too many workers continue to fall through the system’s cracks. Recent data reveals that fewer than 3 in 10 unemployed workers received benefits in 2023. Workers of color feel this most acutely, and study after study shows they are more likely to be out of work but less likely to receive benefits.
In fact, it was these holes in the program that led Congress to enact the temporary pandemic programs. But as hard as the states worked to implement these new programs, building the plane while flying led to inevitable turbulence.
Reforming the core UI program is the only path toward a sustainable future. And that’s why our plan lays out the legislative steps we need to transform the system into one that works for all of America’s workers.
If we’re able to truly transform and modernize the system, it would be a tremendous benefit to businesses, workers, and the entire economy. Congress cannot and should not squander this opportunity to safeguard our workers for the long term. Now is the time to invest in robust unemployment insurance reform.
