What is Unemployment Insurance and Do You Need it?

Unemployment insurance has made fewer headlines recently because the jobless rate continues to decrease. More people get hired as new positions open, and the economy continues to recover from the downturn that began in 2007. Despite the good hiring news, lower rates of out-of-work Americans receive unemployment benefits than ever before.

A new study claims 3 million Americans have been out of work for more than six months, which is down from 6.8 million Americans in 2010. A less cheery statistic from the report, published by the National Employment Law Project, is that only 27 percent of out-of-work Americans received unemployment benefits in 2014. Low-income workers were particularly hard hit. The study claims the unemployment insurance system is broken, and it needs to be fixed.

The difficulty is that unemployment insurance runs out in most states after six months. Other states have shorter terms. Qualifications vary among jurisdictions. The overriding prerequisite is that applicants must have lost a job through no fault of their own. Furthermore, some states require people to be actively looking for jobs while receiving benefits.

Other issues arise concerning which workers are eligible for the benefits. Some states only give unemployment insurance to those who lost full-time employment as opposed to part-time or temporary work. Many programs do not cover partial unemployment. If someone has a part-time job, that person may not be eligible to receive benefits during or after the job tenure.

A significant concern about too expansive jobless benefits is that they may create a false sense of security in workers. A January 2015 report issued by University of Oslo economist Marcus Hagedorn stated that when emergency assistance ran out at the end of 2013, more than 1,8 million jobs were created in the United States. Jobless benefits can make workers pickier about the jobs they choose or lead them to choose a position that meets only the minimum requirements for future benefits to keep money flowing.

Despite the difficulties and faults of unemployment insurance programs, extra money for Americans helps maintain the consumer-based economy. When difficult times hit, through no fault of the everyday American worker, benefits stave off what could become economic calamities. No one wants to rely on unemployment, but workers should be ready to accept extra help. Minimum standards in each state are not particularly burdensome until the right job comes along. Unfortunately, some workers may have to accept jobs not well-suited to their skills and levels when assistance expires.

Job seekers appear to be more confident in 2015 than in previous years, particularly because the burgeoning health care industry has provided ample opportunities for millennials looking for a career. The technology and engineering industries are also expected to grow significantly because considerably more tasks that were previously done by manual labor are now done machines whose workload continues to expand. As baby boomers retire, a new work force must step in to replace them, which can pull more workers out of the unemployment trap.

Unemployment insurance is necessary in the United States. Such programs have been in place since the Great Depression to help American workers survive if the economy falters. Anyone with a full-time job is assured at least a temporary safety net if something goes awry.

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