Unemployment insurance (UI) is an essential part of the American social safety net. UI gives laid-off workers time to find or retrain for a new job while ensuring their purchasing power (this is especially important during economic downturns). The federal government first established nation wide coverage with the Social Security Act of 1935. Under this system states play a crucial role, jointly financing and administering the program with the federal government. Generally, benefits last a total of 26 weeks. During recessions extensions are typically issued, although conservatives often attempt to block the legislation.
Cry Wolf Quotes
…to impose this burden at this time, when industry is just struggling to get on its feet, is going to still further retard the very recovery which is necessary to create these reserves. That is the basis of our opposition to these provisions.
Unemployment insurance, which in many instances places a premium on indolence, would unquestionably defeat this proposed plan of the Administration to place workers in the areas of lower living costs and keep them gainfully employed.
It would undermine the fabric of our economic and social life by destroying initiative, discouraging thrift, and stifling individual responsibility.
In all probability, however, compulsory unemployment insurance cannot be had without an amendment to the Constitution, probably both state and federal, as such a measure might be attacked on the grounds that it is confiscation of property without due process of law.
Related Laws and Rules
San Francisco Fed Finds Unemployment Insurance Doesn't Significantly Contribute to Unemployment Levels
Unemployment insurance doesn't encourage people to stay jobless.
Moody’s Analytics Advocates Unemployment Insurance as Stimulus
For every $1 spent on unemployment benefits, GDP increases by $1.61.
Congressional Budget Office Says Unemployment Benefits Have Strongest Stimulative Effect
Unemployment benefits make macroeconomic sense during a recession.
Backgrounders & Briefs
By Elizabeth Tandy Shermer, PhD, February 2010
Unemployment insurance benefits – including their length, eligibility, and expense – are again in the spotlight. The arguments are hardly new.
Center for Economic and Policy Research (CEPR) is a progressive think tank that concentrates on social and economic policy, both domestic and international.
The National Employment Law Project is an organization that promotes economically just public policy in the face of the prevailing trends of the law several decades.