Unemployment Not Working for Many
Posted September 26, 2001 in Press Releases
by Catherine Candisky
It seldom pays to be out of work in Ohio.
Fewer unemployed people receive benefits in this state than in most others because Ohio has some of the strictest eligibility standards in the nation, according to a study by Policy Matters Ohio, a nonprofit research organization based in Cleveland.
Last year, Ohio ranked 34th in the nation with 31 percent of its unemployed receiving benefits.
Many low-wage and part-time workers don't qualify for benefits. Those who leave their jobs for family-related reasons, such as caring for a sick child, also are excluded.
At the same time, Ohio employers' taxes have declined, allowing some 35,000 -- about 15 percent of all employers in the state -- to pay no state taxes for unemployment insurance, according to the report, to be released today.
"Unemployment insurance is critical, temporary support for jobless workers. But Ohio's system doesn't fit the needs of today's work force, especially those who are lower-paid,'' said Zach Schiller, who wrote the report, "Unemployment Isn't Working: A Proposal to Better Insure Ohio's Workers.''
The system wasn't designed to meet the needs of all workers, said Andrew E. Doehrel, president of the Ohio Chamber of Commerce and co-chairman of the state's Unemployment Compensation Advisory Board.
"It was not set up to take care of casual contacts with the work force and reimburse people as they go in and out,'' Doehrel said. "It is designed to be a bridge for employees who are attached to the work force and lose their job to no fault of their own.''
To be eligible for benefits, Ohioans must work at least 20 weeks during the year and make at least 27.5 percent of the state's average weekly wage. This year, that amounted to $169 a week or $3,380 a year, the highest minimums in any state, the report said. Recipients receive half their weekly earnings, up to $303, for up to 26 weeks.
Those requirements mean tens of thousands of unemployed Ohioans -- most who worked minimum-wage jobs or part-time -- can't get benefits, the report said.
A part-time worker who worked 20 hours a week for $8 an hour would not qualify. A minimum-wage worker who made $5.15 an hour would have had to work 32.8 hours a week to receive benefits. Nearly 19 percent of Ohio's work force works less than 35 hours a week.
Yet, the report said, low-wage workers are the most likely to become unemployed and the problem will only grow as the Ohio and national economies continue to sag.
Unlike a handful of other states, Ohio makes no exception for workers forced to leave their jobs to care for a sick child or elderly parent, those who quit to follow a spouse who is transferred, and victims of domestic violence who leave to get away from an abusive partner.
With thousands of Ohioans leaving welfare for relatively lower-income jobs and increasing unemployment, the time is ripe to overhaul the system, Schiller said.
Among the report's recommendations:
* Determine eligibility based on hours worked, not earnings. For starters, reduce the earnings requirements to allow any minimum-wage earner working 20 hours a week for at least 20 weeks to qualify.
* Increase benefits to 60 percent of a worker's previous weekly wage.
* Allow benefits to workers forced to leave a job for compelling family circumstances.