Senate Democrats want to spend $3 billion to fix state unemployment systems and make it easier to collect jobless checks

Unemployment protest — Unemployed people at a rally last year in Philadelphia, Pennsylvania.
Cory Clark/NurPhoto via Getty Images

Senate Democrats are calling for $3 billion in funding for the unemployment insurance system.
Overburdened, aging state-run systems were put to the test during the pandemic, and many workers saw delays.
The 20 Democrats want the funding to ensure that won't happen again in another downturn.

The pandemic revealed the cracks in unemployment systems across the country, with some recipients waiting months to collect the relief checks meant to help keep them afloat during the unprecedented economic shutdown.

Now, top Senate Democrats are calling for billions to fund state unemployment insurance programs after "decades of underinvestment." In a letter, twenty Democrats — including Senate Finance Chair Ron Wyden of Oregon, and Massachusetts Sens. Elizabeth Warren and Ed Markey — called on Congress to allocate $3.2 billion to shore up unemployment systems in the next government funding bill.

"We can't expect the UI system to scale up overnight and function well in an economic downturn if we don't provide strong, consistent funding — including during economic expansions," the senators wrote.

An analysis from the Minneapolis Federal Reserve Bank found that many states struggled to get benefits out the door on an "acceptable" timeline, which the Department of Labor defines as a first payment within 14 to 21 days after the first eligible week.

Just half of states made at least 54% of their payments within 21 days in August 2020, according to the Minneapolis Fed. It took Kentucky 77 days to send out their first Pandemic Unemployment Assistance benefits, one pandemic-era UI expansion that made gig workers and freelancers eligible to collect checks.

Those bureaucratic delays and aging infrastructure had tangible impacts on the workers waiting for checks: Bloomberg Businessweek reported that Ralph Wyncoop, an Uber driver in Las Vegas, struggled to receive PUA benefits. He initially applied in May 2020, after being told that he'd be eligible for benefits backdated to March — but those didn't come. His application was turned down in July; he finally got his benefits by Christmas, but in the meantime had had a heart attack and was evicted. He was found dead in a motel on March 17, 2021.

Unemployment claims are now dipping to 50-year lows with the Labor Department reporting on Thursday that roughly 200,000 people filed for jobless benefits last week, similar to levels seen in the strong labor market before the pandemic. Those have trended downward over the last year as the economy rebounded, setting up a favorable landscape for workers trying to find new jobs that either pay more or have better working conditions.

Wyden initially pressed to include state unemployment reforms in President Joe Biden's Build Back Better legislation. But it fell out of consideration and Congress has achieved very little to shore up what many experts believe is an outdated part of the social safety net.

Read the original article on Business Insider