Unemployment Insurance

The federal-state unemployment insurance system (UI) helps many people who have lost their jobs by temporarily replacing part of their wages while they look for work.  Created in 1935, it is a form of social insurance in which taxes collected from employers are paid into the system on behalf of working people to provide them with income support if they lose their jobs.  The system also helps sustain consumer demand during economic downturns by providing a continuing stream of dollars for families to spend.

The basic unemployment insurance program is run by the states, although the U.S. Department of Labor oversees the system.  The basic program in most states provides up to 26 weeks of benefits to unemployed workers, replacing about half of their previous wages, on average.  States provide most of the funding and pay for the actual benefits provided to workers; the federal government pays only the administrative costs.  Although states are subject to a few federal requirements, they are generally able to set their own eligibility criteria and benefit levels.
CBPP – Introduction to Unemployment Insurance

Unemployment Insurance Costs:
Unemployment Insurance allocated for Texas in FY2016: $123 million total [roughly]

Problems:
For state unemployment tax purposes, only the first $9,000 paid to an employee by an employer during a calendar year constitutes “taxable wages.”
Texas Workforce Commission – Unemployment Tax Basics

 

Solutions:

  •  Raise the taxable wage for employers to $30,000 annually
  • Amend the Texas constitution so that the maximum weekly benefit amount is higher than 47.6% of the average weekly wage
  • Amend the Texas constitution so that the unemployment insurance can be received beyond 26 weeks

 

Alternatives:

How to finance state unemployment insurance without federal dollars?

 

Texas Constitution
Code – Labor Code
Chapter – 201 Unemployment Compensation Act
Section – 204.006 Initial Contribution Rate
Chapter – 207 Benefits
Section – 207.002 Benefits for Total Unemployment

 

NYT – How to Stop the Downturn

CBPP – Policy Basics: How Many Weeks of Unemployment Compensation Are Available?

CBPP – Failure to Extend Emergency Unemployment Benefits Will Hurt Jobless Workers in Every State

NPR – Finding Middle Ground In The Economic Debate

EPI – Policy responses to long-term unemployment

Columbia Tribune – A little breathing room

Huffington Post – Countries With The Most And Least Generous Unemployment Benefits

FORBES – World’s Best Places For Unemployment Pay

Huffington Post – Banks Extract Fees On Unemployment Benefits

Could you live on $230 a week? The inequity of unemployment insurance in the South

Bank of America Makes Millions Charging Fees to Withdraw Unemployment Benefits

Huffington Post – Florida, California Take Cut Of Bank Fees On Unemployment Benefits

Jobless Paying Millions in Bank Fees to Get Unemployment Benefits

CNN – Another twist for the unemployed: Debit card fees

Time to call it: North Carolina’s experiment with jobless benefits has failed

Think Progress – At Least 30 Countries Have Unemployment Benefits More Generous Than The U.S.

Think Progress – 2.3 Million Children Live With Unemployed Parents Who Were Just Cut Off From Benefits

The Guardian – Unemployment benefit: the view from Germany

Vox – Why unemployment benefits should be extended in recessions: US evidence

Legal Aid Society – Unemployed Workers Demand Comprehensive Unemployment Benefit Reform

Center for American Progress – Strengthening Unemployment Protections in America

Missouri Supreme Court tosses out state Senate vote that cut state’s unemployment benefits