America's unemployment system is broken. With millions of workers still without jobs, it's time to finally fix it.

insider@insider.com (Julia Raifman,Will Raderman) 

© Provided by Business Insider Unemployed people at a rally last year in Philadelphia, Pennsylvania. Cory Clark/NurPhoto via Getty Images

Federal pandemic unemployment insurance provided essential support to unemployed workers.

Now that it's gone, the disjointed unemployment insurance system once again excludes most who need help.

If it doesn't act, Congress risks making porous unemployment insurance a silent crisis until the next recession.

Julia Raifman, ScD is an assistant professor at the Boston University School of Public Health and leads the COVID-19 US State Policy database.

Will Raderman is a research fellow at the Boston University School of Public Health and contributor to the COVID-19 US State Policy database.

This is an opinion column. The thoughts expressed are those of the author.

How many families might never experience food insecurity if permanent improvements were made to unemployment insurance? As unemployment shot up to historic highs because of the pandemic, new Census data show that the poverty rate went down. Congress protected people who lost work with legislation that included necessary expansions to unemployment insurance. Reforming unemployment insurance will ensure similar safeguards are in place at all times.

Federal pandemic supplements supported millions of workers and their families during a period of intense tumult. Gig workers and those in less conventional positions, who are typically ineligible for state unemployment insurance, could qualify for federal assistance. The higher benefit amounts distributed were associated with reduced food insecurity, and the improved benefit durations allowed for financial stability across many months of unalterable unemployment. Such enhancements reduced risk of depressive symptoms and helped prevent long-term health damage to workers and their children.

The upgrades were a major divergence from the pre-pandemic norms, when millions of unemployed workers were left stranded with insufficient access, amounts, and lengths of assistance. This month's expiration of federal unemployment programs ensured the immediate resumption of that inadequate system, hurting ten million workers now and tens of millions more in the years to come. Without implementing improved and lasting national standards in the reconciliation bill, Congress once again risks making porous unemployment insurance a silent crisis until the next recession. Out of sight and out of mind, except for those out of work.

Major economic downturns, like the past year and a half, result in extended periods of unemployment. These moments typically receive intensive media attention and legislative responses. Less discussed is the fact that there is a constant cycle of job churn even in normal years, with numbers of job separations comparable to the past twelve months. In 2019 alone, the equivalent of 11% of the total labor force went from employed to an unemployed designation at some point. Meanwhile, state unemployment insurance systems excluded most by design.

Workers in the United States require the same consistent income protections provided to people transitioning between jobs in other nations. This is the time to enact three key changes to improve regular unemployment insurance in the upcoming reconciliation bill: larger weekly payment amounts provided to unemployed workers, easier rules to qualify, and longer eligibility periods.
Workers need improved programs

Bigger benefits are needed. In the first quarter of this year, the average unemployment insurance amount provided by regular state programs was below a full-time federal minimum wage job for workers in 16 states. Zero states guarantee a minimum weekly benefit amount equivalent to the federal minimum wage. Without the now-expired federal supplements, insurance meant to provide safe financial continuity between jobs does not ensure security.

That assumes the worker even qualifies. Just over 1 in 4 unemployed workers received benefits in 2019. More people were excluded than included. Recent entrants to the labor force, those returning to work after raising children, gig workers, and self employed individuals are among the tens of millions of people typically unable to qualify. Many who were ineligible for regular unemployment insurance were able to receive payments through the Pandemic Unemployment Assistance program, but it expired on Labor Day in states that kept it active through the summer. Normal eligibility must be broadened to help a greater number of lower-income workers and those in nontraditional employment situations.

Those who are struggling to find new jobs for more than 6 months - presently 3.18 million individuals - have now lost virtually all remaining support except those in the few states with Extended Benefits programs still running. As the volume of recent research indicates, the financial cut-off is unlikely to impact overall employment levels or speed of labor recovery, but will force families to drastically reduce their spending.

Officials argue there's been sufficient time to find work, but this doesn't reflect the current state of affairs - the dangerous Delta variant, inconsistent childcare, and climate disasters in regions across the country - nor does it address the challenges facing workers whose duration of unemployment is over 26 weeks, the maximum span which state unemployment insurance benefits generally last for. This group of the long-term unemployed has grown in size during the pandemic, but in every single month since November 2001, there have been over a million long-term unemployed workers.

Finding a job is challenging. As time stretches on, it gets harder and harder to be considered for positions, and the probability of employment in the future worsens. The longer someone is unemployed, the weaker their attachment to the job market becomes. Unemployed workers' likelihood of withdrawing from the workforce completely goes up. Unemployment insurance gives them a reason to keep searching and reduces their risk of death. The length of benefit eligibility needs to be extended.

In addition to better baseline levels, linking benefit enhancements to unemployment data would ensure that unemployment insurance is automatically extended in recessions without the need for congressional action or susceptibility to politics as seen this summer. Policymakers ignored relevant evidence with harmful consequences. Despite firm declarations that unemployment insurance was slowing job growth, states that retained the federal expansions saw more employment growth in August than states that cut benefits.

High pandemic unemployment revealed cracks in the system that have long existed. Federal programs that temporarily fixed that damage serve as an example of how we can make enduring improvements to policies.