'I'm alarmed': With recession fears rising, jobless benefits still fall short: Report
'I'm alarmed': With recession fears rising, jobless benefits still fall short: Report
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Can you get unemployment if you quit? What to know about benefits.
Being out of work doesn't mean you automatically qualify for unemployment benefits. Here's what to know before applying.
During the COVID-19 recession, 22 million laid-off workers sought unemployment benefits, sparking chaos in the payment system and compounding the financial woes of jobless Americans.
Five years later, with many forecasters predicting another downturn is likely in 2025, a far less burdened benefits system remains plagued by myriad problems that could hamper payments to Americans who lose their jobs in an economic slump, according to a new report.
Nearly 1 in 5 unemployment insurance recipients say their benefits were inadequate, with a third complaining they've struggled with food insecurity despite the payments, according to a survey and study by the National Employment Law Project.
Large shares of beneficiaries also lament delayed payments, jammed phone lines, hard-to-navigate websites and incorrectly denied benefits, among other issues, according to the survey, which was conducted in partnership with online polling firm YouGov in September.
The firms surveyed 1,480 workers who were unemployed at some point from 2019 to 2024 and the results were provided exclusively to USA TODAY.
'I'm alarmed,' said Amy Traub, senior researcher and policy analyst for NELP and a co-author of the study. 'The unemployment insurance system is really falling far short in its function of supporting unemployed workers.'
The gaps exist even though Congress provided $1 billion in the American Rescue Plan of 2021 to shore up jobless benefits. Traub said the money did foster more timely payments and website improvements but there are still shortcomings in those and other areas.
States finance unemployment payments themselves while the federal government bankrolls the system's technology and infrastructure. Both are funded by payroll taxes that are generally paid by employers.
Why do we have unemployment insurance?
Besides helping workers make ends meet when they lose their jobs, jobless benefits bolster consumer demand, helping avoid – or dig the economy out of – a recession, the NELP report says. And the payments ensure that workers have enough time to find a job that best suits their skills, improving the efficiency of the labor market and economy.
Economists surveyed say there's a nearly 50% chance of a recession because of President Donald Trump's sweeping tariffs on imported goods, according to a survey by Wolters Kluwer Blue Chip Economic Indicators. JPMorgan Chase has put the odds at 60%.
Among the lingering trouble spots with the system:
Benefits fall short
Nineteen percent of the unemployment recipients polled said the money they received wasn't enough to meet their financial needs, the survey showed.
To be sure, the checks go a long way toward helping laid-off workers stay afloat. Of unemployment applicants who didn't receive benefits, 51% experienced hunger, 40% struggled to pay their rent or mortgage and 37% had a hard time paying medical bills, according to the survey. By contrast, among those obtaining payments, 33% went hungry at times, 29% had issues with housing payments and 30% couldn't pay medical costs.
Yet it's troubling that about a third of beneficiaries still had difficulty covering basic expenses, Traub said.
'During the next recession, if we have large numbers of workers who lose their jobs, we want to be sure they're not going hungry or losing their homes,' she said.
A big reason many recipients can't cover such necessities is the wide disparities among states in their benefit disbursements, Traub said.
In early 2024, for example, Alabama workers received an average benefit of $252 a week, replacing 29% of their prior wage on average, while workers in Washington state got an average $721 a week, or 49% of their previous pay.
On average across the U.S., unemployment covered 36% of a worker's previous pay.
Also, most states provide up to 26 weeks of benefits – a standard that's typically expanded in a recession – but 13 states dole out checks for 12 to 21 weeks, including Arkansas, Iowa, Michigan, Oklahoma, South Carolina, Alabama, Kansas and Florida, according to the Center on Budget and Policy Priorities.
Jammed phone lines, uncooperative websites, late payments
During the COVID-19 pandemic, an unprecedented surge of applicants struggled to obtain payments. Surprisingly, freshly laid-off workers nowadays, numbering about 200,000 each week, still face obstacles.
From 2022 to 2024, about 22% of applicants said they couldn't reach their state unemployment office by phone, the same share as during the pandemic (2020-2021); 20% complained of hard-to-navigate websites vs. 23% during the health crisis; and 17% pointed to delays receiving payments, compared to 21% during the crisis.
Many states beefed up staffing during the COVID-19 pandemic, shifting workers from other parts of state unemployment agencies to customer service, but moved them back to their old positions as the spike in applications ebbed, Traub said. In many cases, that left a reduced but still sizable share of workers struggling to access benefits.
Employers discourage workers from applying
Nearly 1 in 5 workers said an employer tried to deter them from applying for benefits, with 14% saying such steps included telling them they weren't eligible and 5% threatening retaliation if they applied.
Employers may have the incentive to dissuade staffers from filing for unemployment because the taxes they pay to support the benefits system are based on the number of their workers who successfully file claims.
'It's not really up to the employer who's eligible and who's not,' Traub said.
Incorrectly denied benefits
About 17% of applicants polled said they were improperly denied benefits since the pandemic. The question of whether applicants are entitled to payments can get thorny, hinging on whether they were laid off or fired for cause, and whether they met thresholds for the number of hours they worked and the wages they earned in previous months, Traub said
Discrimination
About 7% of applicants said they faced discrimination because of race or other reasons when they sought benefits, the survey showed.
In a related issue, a growing number of states are using new ID verification systems to detect fraud, according to the report, which was coauthored by researchers Alexander Hertel-Fernandez and Sanjay Pinto. Twelve percent of Black workers report trouble verifying their identity, more than twice the share of white employees, according to NELP's survey.
The NELP report pointed to facial recognition technology that's less accurate for people with darker skin and questions that rely on data from credit bureaus. Black workers are less likely to have substantial credit histories on file, the report said.
Workers in Southern states face more hurdles
Broadly, workers in Southern states are far more likely than those in other regions to complain of discrimination, delayed payments, low payment levels and inadequate duration of payments, the report said. It cited racism and a 'lack of adequate support for social infrastructure' that may more prevalent in the South.
Among NELP's recommendations to bolster the system:
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A variety of market observers quickly weighed in hours after Tuesday evening's unveiling to suggest that the deal may not have a lot of meat on the bones — but at least relations are no longer moving in the wrong direction. The talks perhaps underscored how unlikely a comprehensive trade deal is anytime soon, noted AGF Investments Greg Valliere, "but at least relations may not worsen as talks continue throughout the summer." Both sides promised additional talks in the weeks or months ahead, but none have yet been scheduled. Veronique de Rugy, a professor at the Mercatus Center at George Mason University, suggested the talks continued to show China's leverage. "China is hurting, yes—but they still hold the upper hand on critical resources, and they know how to use them." Any lessening of tensions — and freer flow — of these mineral resources in China would be a significant boost to the global economy with China holding outsized leverage in both the reserves and processing capacity of these key building blocks for everything from computers to electric vehicle batteries to medical devices. Likewise, the US offering concessions on export controls would be a significant move after years where successive US administrations have wielded these controls — especially around the design and manufacture of semiconductors — by saying they need to be tight on China for national security reasons. Read more here. May's Consumer Price Index (CPI) report will be released on Wednesday and its expected to show that prices rose a bit faster than in April. Yahoo Finance's Allie Canal breaks down what to look out for and how President Trump's tariffs are impacting what consumers are now paying for goods and services. Read more here. Now that the US-China trade truce is back on track, both sides are keen to ensure it stays that way. China's Vice Premier He Lifeng said both sides need to now 'show the spirit of good faith in abiding by their commitments and jointly safeguard the hard-won results of the dialogue.' Bloomberg News reports: Read more here. Reuters reports: Read more here. Despite the US-China trade truce resuming the pain from President Trump's tariffs remains in China, especially among small exporters. Reuters reports: Read more here. Japan warned Wednesday that tariffs threaten its economic growth, the government said in a monthly report. Reuters reports: Read more here. Reuters reports: Read more here. Reuters reports: Read more here. A federal appeals could said on Tuesday that President Trump's sweeping tariffs can continue for now. This is a significant win for Trump, who introduced tariffs back in March and declared "Liberation Day," as he saw them as a way to free the US from what he called unfair trade practices. Bloomberg News reports: Read more here. Early summer sales for Inditex, the owner of fashion retailer Zara, came in weaker, as the company missed expectations for first quarter sales on Wednesday. President Trump's tariffs have impacted consumer demand in the US and other major markets. Reuters reports: Read more here. After weeks of back and forth, the US and China have agreed on a framework to implement the Geneva consensus that helped ease tariffs. The breakthrough came after two days of talks in London, including a marathon session on Tuesday. US Commerce Secretary Howard Lutnick said both sides had to "get the negativity out" before making progress. 'Now we can go forward to try to do positive trade, growing trade,' he said. As part of the deal, Beijing has promised to speed up shipments of rare earth metals, a crucial component for global auto and defense industries. Washington will ease export controls. This marks the first sign of movement on key issues. The proposal will now be presented to President Trump and China's Xi. Still, the discussions also did little to resolve a long-standing issue: China's trade surplus with the US. 'Markets will likely welcome the shift from confrontation to coordination,' said Charu Chanana, chief investment strategist at Saxo Markets. 'We're not out of the woods yet — it's up to Trump and Xi to approve and enforce the deal.' The meeting was set up after a phone call between the two leaders, following weeks of each side accusing the other of breaking the Geneva commitments. Both countries had used chips, rare earths, student visas and ethane as bargaining tools. Josef Gregory Mahoney, a professor at East China Normal University, said trust, not money, has been the biggest casualty of the trade war. 'We've heard a lot about frameworks,' he said. 'But the fundamental issue remains: Chips versus rare earths. Everything else is a peacock dance.' Bloomberg reports: Read more here. Treasury Secretary Scott Bessent told House lawmakers on Wednesday that the Trump administration may extend the 90-day tariff pause on some countries in order to continue trade negotiations. When asked if Americans should prepare for another "Liberation Day" on July 9, when the tariff pause ends for most countries, Bessent said that the administration may choose to move the deadline on 18 of the most important trading partners, so long as they make an effort to come to the negotiating table. "We are working toward deals on those, and it is highly likely that [for] those countries — or trading blocs, in the case of the EU — who are negotiating in good faith, we will roll the day forward to continue good faith negotiations," Bessent said (see video below). "If someone is not negotiating, then we will not." A recent report on the drastic decline of US ocean imports serves as an example of how President Trump's increased tariffs on China affected supply chains and several industries as ttalks continue. Reuters reports: Read more here. The Treasury Department says that the US government is successfully using tariffs to decrease the budget deficit by more than $30 billion, largely due to increased customs receipts. Reuters reports: Read more here. China will ease curbs on exports of rare earth minerals for six months as part of a new trade understanding with the US, according to The Wall Street Journal. The move could add more uncertainty for American manufacturers, particularly the auto industry, which has been pushing for easier access. The Journal notes that the move gives China leverage down the line if tensions ratchet back up. From the report: In celebrating the agreement early Wednesday, President Trump noted "any necessary rare earths will be supplied, up front, by China." He did not mention any time limit on loosening those restrictions. Treasury Secretary Scott Bessent, in testimony before Congress on Wednesday, painted Wednesday's agreement as an incremental step on the longer road to a more comprehensive trade deal. "A trade deal today or last night was for a specific goal, and it will be a much longer process," he told a House committee. When asked if current US tariff levels on Chinese imports would not change again, Commerce Secretary Howard Lutnick told CNBC, "You can definitely say that." "We're in a great place with China," Lutnick said Wednesday. While the US-China truce framework is awaiting final word from US President Trump and Chinese President Xi Jinping, Lutnick added, "Both sides are really positive." The agreement is largely viewed as reestablishing the "handshake" that US and Chinese officials reached in Geneva last month, as details on a larger trade pact remain scant. Trump posted on social media this morning that the US has imposed 55% tariffs on China, a number that does not include any new tariffs but instead comprises some preexisting tariffs, Trump's fentanyl tariffs, and 10% "Liberation Day" tariffs. Lutnick touted that, as a result of the two-day talks, the US will gain access to rare earths and magnets, while the Chinese delegation sought to remove the US's export controls. He added that the trade deficit remains an ongoing issue, stating, "We're going to examine how China can do more business with us." May's Consumer Price Index (CPI) report showed inflation pressures eased on a monthly basis despite investor concerns that President Trump's tariffs would accelerate the pace of price increases. The Consumer Price Index (CPI) increased 0.1% on a monthly basis in May and 2.4% on an annual basis, a slight uptick from April's 2.3% gain. Yahoo Finance's Allie Canal reports: Read more here. I would keep an eye on consumer names off the news of a trade deal with China floated by President Trump this morning (see our prior post below). Seeing upticks premarket in heavily China-exposed retailers such as Nike (NKE), Walmart (WMT), Target (TGT), and Abercrombie & Fitch (ANF). The premarket gains here aren't mind-blowing in part because tariffs appear to still be in place. Trump posted on Truth Social: OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT! THANK YOU FOR YOUR ATTENTION TO THIS MATTER!" A variety of market observers quickly weighed in hours after Tuesday evening's unveiling to suggest that the deal may not have a lot of meat on the bones — but at least relations are no longer moving in the wrong direction. The talks perhaps underscored how unlikely a comprehensive trade deal is anytime soon, noted AGF Investments Greg Valliere, "but at least relations may not worsen as talks continue throughout the summer." Both sides promised additional talks in the weeks or months ahead, but none have yet been scheduled. Veronique de Rugy, a professor at the Mercatus Center at George Mason University, suggested the talks continued to show China's leverage. "China is hurting, yes—but they still hold the upper hand on critical resources, and they know how to use them." Any lessening of tensions — and freer flow — of these mineral resources in China would be a significant boost to the global economy with China holding outsized leverage in both the reserves and processing capacity of these key building blocks for everything from computers to electric vehicle batteries to medical devices. Likewise, the US offering concessions on export controls would be a significant move after years where successive US administrations have wielded these controls — especially around the design and manufacture of semiconductors — by saying they need to be tight on China for national security reasons. Read more here. May's Consumer Price Index (CPI) report will be released on Wednesday and its expected to show that prices rose a bit faster than in April. Yahoo Finance's Allie Canal breaks down what to look out for and how President Trump's tariffs are impacting what consumers are now paying for goods and services. Read more here. Now that the US-China trade truce is back on track, both sides are keen to ensure it stays that way. China's Vice Premier He Lifeng said both sides need to now 'show the spirit of good faith in abiding by their commitments and jointly safeguard the hard-won results of the dialogue.' Bloomberg News reports: Read more here. Reuters reports: Read more here. Despite the US-China trade truce resuming the pain from President Trump's tariffs remains in China, especially among small exporters. Reuters reports: Read more here. Japan warned Wednesday that tariffs threaten its economic growth, the government said in a monthly report. Reuters reports: Read more here. Reuters reports: Read more here. Reuters reports: Read more here. A federal appeals could said on Tuesday that President Trump's sweeping tariffs can continue for now. This is a significant win for Trump, who introduced tariffs back in March and declared "Liberation Day," as he saw them as a way to free the US from what he called unfair trade practices. Bloomberg News reports: Read more here. Early summer sales for Inditex, the owner of fashion retailer Zara, came in weaker, as the company missed expectations for first quarter sales on Wednesday. President Trump's tariffs have impacted consumer demand in the US and other major markets. Reuters reports: Read more here. After weeks of back and forth, the US and China have agreed on a framework to implement the Geneva consensus that helped ease tariffs. The breakthrough came after two days of talks in London, including a marathon session on Tuesday. US Commerce Secretary Howard Lutnick said both sides had to "get the negativity out" before making progress. 'Now we can go forward to try to do positive trade, growing trade,' he said. As part of the deal, Beijing has promised to speed up shipments of rare earth metals, a crucial component for global auto and defense industries. Washington will ease export controls. This marks the first sign of movement on key issues. The proposal will now be presented to President Trump and China's Xi. Still, the discussions also did little to resolve a long-standing issue: China's trade surplus with the US. 'Markets will likely welcome the shift from confrontation to coordination,' said Charu Chanana, chief investment strategist at Saxo Markets. 'We're not out of the woods yet — it's up to Trump and Xi to approve and enforce the deal.' The meeting was set up after a phone call between the two leaders, following weeks of each side accusing the other of breaking the Geneva commitments. Both countries had used chips, rare earths, student visas and ethane as bargaining tools. Josef Gregory Mahoney, a professor at East China Normal University, said trust, not money, has been the biggest casualty of the trade war. 'We've heard a lot about frameworks,' he said. 'But the fundamental issue remains: Chips versus rare earths. Everything else is a peacock dance.' Bloomberg reports: Read more here. Error in retrieving data Sign in to access your portfolio Error in retrieving data