Benefit Hikes, Better Coverage Needed
UAW Joins Fight to Aid the Unemployed

Story by Roger Kerson,
with reporting by
Jennifer John and Sam Stark

On Sept. 21, Congress approved a $15 billion bailout package for the airline industry, which had been left reeling by terrorist attacks of Sept. 11.

Joyce Cooper did not receive a single penny.

Cooper, a single mother from Detroit, was also left reeling after Sept. 11, when she lost her job as a customer service agent at Northwest Airlines.

“I have never missed a single day and was never late,” Cooper said at a public hearing for laid-off workers at UAW Local 7 in February. “I was never expecting to receive unemployment compensation.”

The hearing was convened by the Southeast Michigan Workers’ Rights Board, a panel of labor and civic leaders, which includes UAW Vice President Bob King. The board, which takes testimony on labor-related public policy issues, was created by Jobs with Justice, a union, community and religious coalition that advocates for working families.

The Good Times are Gone
“Last year, we were happy campers,” Cooper told the Workers’ Rights Board. “I had health care coverage, the payments on my daughter’s braces were current, and Metropolitan Detroit airport was bustling.”

These days, Cooper has “a mortgage I can’t meet, a failing automobile and a 15-year-old daughter with late dentist bills.”

While airline companies got government aid just days after Sept. 11, it was months before Congress lifted a finger to help Cooper and 1.6 million other unemployed workers who were in danger of seeing their benefits cut off on March 11, the six-month anniversary of the terrorist attacks. Current law provides for just 26 weeks--or six months--of unemployment benefits for eligible workers.

Facing public pressure to act before the March 11 deadline, Congress enacted an economic stimulus package on March 8 that will extend unemployment benefits an extra 13 weeks, and 26 weeks in states where the unemployment rate is above 4 percent.

The relief is welcome, but comes at a high price. In exchange for $13 billion in aid for working families, pro-business legislators in the House and Senate demanded $64 billion in corporate tax breaks over five years. These irresponsible giveaways will fatten corporate profits, throw federal and state budgets further out of whack, and do little to provide real economic stimulus.

Even worse, the benefits extension does nothing to fix serious flaws in our national unemployment insurance system. This federally mandated and state-run social program is supposed to provide a buffer against hard times.

A solid unemployment insurance program is “a particularly effective stimulus” for the economy, argues Peter Orszag, a Senior Fellow in Economic Studies at the Brookings Institute. Since consumer spending is the key to pulling our economy out of recession, Orszag says, it makes good sense to put money in the pockets of laid-off workers, who will spend it quickly on pressing family needs.

Six Out of 10 Shut Out

Susan Kramer

Source: National Employment Law Project; U.S. Department of Health and Human Services

Unfortunately, unemployment insurance in the United States has stopped making sense. More than half of unemployed workers--60 percent--never receive any benefits. Because the system has a dizzying array of rules and requirements, many workers think they’re ineligible and never apply. Others are turned down because they were allegedly fired “for cause,” or because they were temporary or part-time workers and didn’t work enough hours to qualify.

Ironically, it is temporary and part-time workers, at the bottom of the income scale, who most desperately need the financial boost unemployment benefits can provide.

UI benefits are actually below the poverty level in many states. Individual states set benefit levels; the maximum ranges from a paltry $190 a week in Alabama to $477 per week in Massachusetts. The average weekly benefit is just $238--well under the federal poverty threshold of $339 per week for a family of four.

Continued