In response to the economic crisis sparked by the coronavirus pandemic, changes made to the Unemployment Insurance (UI) system played a critical role in preventing a deep recession by helping workers who had lost their jobs replace lost income. At the onset of the pandemic, Congress acted quickly to create new, emergency UI programs to ensure that all affected workers would be able to claim UI and that the money they received would be sufficient to meet their needs.
Swift action to enhance UI during the pandemic worked: Without UI, 4.7 million more people would have been in poverty, and the overall poverty rate would have been nearly 13% higher.
However, the need to create new UI programs from scratch in the middle of a crisis meant that antiquated state UI systems were overwhelmed, making it difficult for workers to access income support and leaving the system vulnerable to fraud by organized crime.
To ensure the UI system is capable of meeting people’s needs in the future, structural reforms are necessary. By providing more guidance to the more than 50 state and territories’ UI programs that make up the UI system, the Department of Labor can help improve the customer service problems workers experienced. In addition, improving staffing levels on an ongoing basis and permanently changing eligibility criteria to ensure that all workers are able to access UI when they need it will not only improve workers’ economic security but also reduce the chances of fraud in the future.