Senate Democrats Propose Overhaul Of Unemployment Insurance

Today, U.S. Senator Michael Bennet (D- CO.) and U.S. Senator Ron Wyden (D-Ore.) unveiled their proposal to overhaul the nation’s unemployment insurance (UI) system.

“The COVID-19 pandemic has made it overwhelmingly clear that our nation’s unemployment insurance system is inadequate and unreliable for workers when they lose a job,” said Bennet. “Unemployment programs are critical to helping workers stay afloat during difficult times — but too many workers still struggle to access their benefits in our patchwork of outdated state systems.”

“This proposal will protect workers by strengthening and expanding benefits, modernize UI infrastructure with needed technology investments, and prepare us for the future by tying benefits to economic conditions.

The senators’ discussion draft has four goals: Raise base jobless benefits so they cover the basics, minimize disparities between states’ unemployment insurance programs, create a permanent benefit for self-employed workers and other workers who are ineligible for regular UI, and tie extended weeks of benefits to economic conditions.

“Our unemployment insurance system is broken, and it’s been broken for decades. As we’ve seen the last year, it’s much harder for the unemployment system to work in a crisis when it’s been neglected and sabotaged. We can’t fail again to fix it in the wake of the second major economic crisis in 10 years,” said Wyden. “Our proposal would help ensure benefits cover the basics, minimize the glaring disparities between state programs and create a permanent benefit for self-employed workers.”

The proposal would establish new requirements for state unemployment programs to ensure that benefits are adequate and that more workers are covered when they lose a job. This would include requiring that all states offer at least 26 weeks of benefits, replace 75 percent of a typical worker’s wages, cover part-time workers and workers who quit their jobs with good cause, and offer benefits to workers during their first week of unemployment—the “waiting week.”

It would also establish a $250 per week Jobseeker Allowance that would be available to any unemployed workers not covered by the traditional unemployment insurance system, such as self-employed workers and new entrants to the labor force. The proposal also creates a $25 weekly federal allowance per dependent, and provides for federal funding to increase unemployed workers’ wage replacement rates to 100 percent during major disasters or public health emergencies.


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