The unemployment insurance system, created in the 1930s in response to the Great Depression, was designed to keep workers stable while out of a job, and to prop up the economy when it goes sour.

But for most workers, it hasn’t done either particularly well for a long time – something that was easy to ignore when unemployment was reaching historic lows in recent years.

The COVID pandemic, however, laid bare all the problems in the out-of-date and insufficient unemployment insurance system. Now is the time to fix it.

The Maine Legislature will debate the issue this session. The Press Herald reported this week that House Speaker Ryan Fecteau, a Biddeford Democrat, is drafting a bill to overhaul the state unemployment system to, among other things, increase benefits and make them easier to access.

Making it easier would be a welcome change. For years now, it has been getting more difficult for unemployed workers to get aid. In 2019, after two decades of decline, only 27 percent of unemployed workers got any benefits whatsoever, The New York Times recently reported. (In Maine, the rate is 26 percent.)

Workers who do get benefits have seen those decline as well. Payments are now, on average, less than one-third of prior wages – 8 percentage points less than in the 1940s when adjusted for inflation.

Part of the problem is the structure of the program. States are given great flexibility to administer the unemployment system, and many have opted to reduce benefits in order to reward businesses, whose taxes pay for the program. Fewer benefits equals lower taxes.

Many states too have, in one way or another, made it difficult to navigate the unemployment system, often intentionally to discourage workers from seeking aid.

During the LePage administration, Maine was one of the states that used federal funding to revamp its unemployment system in the wake of the Great Recession. The new system, from an outside vendor, experienced problems from the start, keeping people from filing claims. The problems went unaddressed at the time, leaving the system vulnerable.

Then, COVID hit and tens of thousands of Mainers were suddenly out of work. With a faulty system and unprecedented demand, the state was unable to keep up. People waited weeks, even months for benefits, losing homes, vehicles and their good credit in the meantime.

Mass unemployment during the pandemic also showed just how the system fails to reach many kinds of workers. The growing number of gig workers aren’t covered, and low-wage workers get few or no benefits.

So when people had to cut back their hours or stop working to take care of their kids or protect their own health, they were left with little help. Just as with every recession in recent history, extra aid passed by Congress was required to fill the void, covering more workers with higher benefits.

But the aid won’t be around forever, and still many workers will be left in the system’s blind spots. As a result, unemployed people will fall into poverty and eventually out of the workforce. Parents will struggle to balance child care and work. Workers will get stuck in low-wage jobs.

Whether the economy is booming or not, there will be people who are unemployed. The unemployment system should support them when they need it, without barriers or loopholes, so that they can take care of themselves and stay connected to the economy and the workforce.

There’s simply no benefit to leaving Americans to struggle when they are out of work. It’s time for the unemployment system to do its job.


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