Unemployment Insurance Revisions Needed: Ohio’s High Eligibility Standards Harm Poorest Workers Most

Dayton Daily News - February 8, 2002
   

by Zach Schiller, in The Dayton Daily News 

The recession is exposing flaws in Ohio’s unemployment-insurance system.
More than 800,000 unemployed Ohioans sought initial benefits last year, up 42
percent from the year before. The flood of claims has made itself felt in the
frustrating busy signals many applicants are getting when they call to file their claims
and in the mounting number of jobless whose benefits are running out.

Last year, 80,264 people exhausted their benefits, which last up to 26 weeks. That
was nearly two-thirds more than a year earlier. Meanwhile, many unemployed
persons don’t qualify for benefits in Ohio because we have one of the strictest
monetary eligibility standards in the country. To qualify, Ohioans must earn 27.5
percent of the state’s average weekly wage, or $172 a week, for at least 20 weeks.

Under these tight requirements, a worker making the minimum wage must work
more than 33 hours each week for 20 weeks to qualify. In every other state,
someone who works 20 hours a week all year at $8 an hour would qualify when laid
off.

Not in Ohio. Many of those who left welfare to go to work won’t earn enough to
receive benefits if they lose their jobs. Since the last hired are often the first fired,
those brought on in the flush economy of the late 1990s are particularly vulnerable
now.

Other nearby states, such as Kentucky, Indiana and Pennsylvania, have much lower
earnings requirements. The high threshold helps explain why Ohio consistently has
seen a lower proportion of its jobless receive benefits than in the nation as a whole.
The state also is among the most restrictive in granting benefits to those who leave
work for compelling personal reasons, such as to care for a sick family member.

A proposal that would have remedied this last problem and boosted weekly benefits
was turned down in the U.S. Senate this week. So far, the federal government hasn’t
acted to bolster unemployment insurance benefits as it has done in past recessions.

Yet some other states are moving forward on their own with needed improvements.
California and Virginia have raised benefit levels, and the Wisconsin Legislature just
approved an eight-week extension in benefits for those whose benefits run out after
26 weeks. Hawaii passed a benefit extension last year. And Washington state
recently approved a program paying up to a year of benefits to many displaced
workers who are getting skills training.

Ohio should take some of the same steps. We can begin by ensuring that low-wage
workers have the same access to benefits that higher-paid workers do, and allowing
anyone who works 20 hours a week for 20 weeks in a year to qualify.

That would not only provide vital support to unemployed job seekers, it would add
purchasing power to the economy. A recent study for the U.S. Department of Labor
found that each dollar of unemployment-insurance benefits boosts the nation’s
economic output by $2.15, making unemployment benefits important for the whole
community.

Ohio can afford to improve its unemployment-insurance benefits, which are
financed by employer taxes, not the state budget. The state cut taxes more than
most did during the 1990s boom. In fact, during the last three calendar years, tens of
thousands of employers paid no unemployment taxes. Rates have begun to rise, but
they have been below the national average and almost certainly remain so.

Ohio’s reserve fund, which held $1.88 billion as of the end of last year, has started to
decline because more workers have been unemployed and receiving benefits.

However, the Ohio Department of Job and Family Services has estimated that with a
recession like that in the early ’90s, the fund still would remain more than solvent,
with nearly $1 billion.If optimists are right and the economy strengthens in the next few
months, experts generally agree that unemployment will continue to rise until much
later. That includes Montgomery County, where 34,702 people filed initial claims last
year, up 62 percent from the year before.

Ohio needs to strengthen its unemployment-insurance system for those in
immediate need and for the rest of us.

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