Workers Who Quit Jobs May Get Unemployment Aid Through Stimulus

February 12th, 2009|Austin Rouls
State

The language is in the $789 billion compromise plan reached by House and Senate negotiators, according to Mike DeCesare, chief of staff to the provisions sponsor, Representative Jim McDermott. Critics say the change would undermine the original intent of the Depression-era program to provide a cushion for people whose jobs disappear.

“Its fundamentally at odds with the basic tenets of unemployment insurance: temporary cash payments for people who lose their job though no fault of their own,” said Douglas Holmes, president of UWC-Strategic Services on Unemployment and Workers Compensation, a Washington-based group that represents employers. “Unemployment insurance is not public assistance, its not a family support program, its not food stamps.”

The provision is part of a broader effort to update the jobless program. Unemployment in the U.S. climbed to 7.6 percent in January, the highest level since 1992. President Barack Obama has said the economic stimulus bill will help create as many as 4 million jobs.

The stimulus measure includes a $7 billion fund to reward states that adopt changes in unemployment benefits. Among the actions required to qualify, states would have to provide benefits to people who quit a job for a “compelling family reason” such as caring for a sick or disabled member of their immediate family, or because of domestic violence. Workers could collect the benefits only when they started looking for a new job.

Single Mothers

“Were telling single mothers who have to quit their job to care for their child, or women in an abusive relationship who have to quit to get away, you can draw unemployment insurance checks when you are ready to go back to work,” McDermott, a Washington Democrat, said in an interview. “Most states say you can only draw a check if you are fired. Were giving states incentives to move beyond that.”

McDermott has long pressed for an expansion of the unemployment insurance program, and he pushed the measure in the House last year. Expanding unemployment payments meets the goals of the economic stimulus package, he said.

“The money from these checks are in the economy within 20 minutes of the checks being cashed,” he said. “People who get it arent putting the money in their IRAs, they arent putting it in savings accounts, they are spending the money to keep their head above water.”

A 1935 Law

Unemployment insurance is paid by states from taxes collected from employers, and was enacted as part of the Social Security Act of 1935. To qualify for a share of the $7 billion in incentives, states would also have to meet other requirements, such as extending unemployment insurance to certain part-time workers.

McDermott said he supported the change in part because the Family and Medical Leave Act, which allows workers to take unpaid leave, doesnt cover small companies, part-timers and certain lower-wage workers. It limits time off to 12 weeks.

“If someone leaves their job to care for someone in their family with a cold, they shouldnt be getting insurance,” Holmes said. “In any event, this has nothing to do with economic stimulus.”

The economic stimulus package also would allocate funds to continue extended unemployment benefits, providing as much as 33 weeks of extended benefits through 2009. The proposal would also provide an extra $25 each week to recipients.

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