According to Gallup, support for labor unions is near its all-time high, a surprising development to many who thought the labor movement was in irreversible decline. But even with their current pro-labor attitude, most Americans are unlikely to join unions.
Union membership peaked in the 1950s, when one-third of the workforce was organized. Today, even with all the attention-getting strikes, only about 10 percent of the workforce is unionized.
Union benefits tend to spill over to other employers, however, helping to raise wages, increase benefits, and impact hiring practices. But if we really want to improve the lot of the American worker, we also need to focus on what happens to workers when they lose their jobs — something that almost all workers will face eventually.
For the past few years, I have followed 199 workers to study the impact of unemployment and unemployment benefits on their lives. In my research, I find that workers increasingly fall between the “officially unemployed” and the forgotten jobless. The former are deemed worthy of unemployment assistance, whereas the latter are not. However, both groups are finding unemployment benefits to be minimal or even unavailable.
Except for a brief period during the pandemic — at that point the CARES Act gave gig workers short-term access to the social safety net — the reality is that unemployment assistance has shrunk.
In North Carolina, where I teach, unemployment assistance maxes out at $350 per week for 12 weeks. That’s less than half the 26 weeks that the secretary of labor recommended back in 1955. Between 2008 and 2019 in North Carolina, the percentage of an unemployed worker’s wages replaced by unemployment assistance fell from 53 percent to 38 percent. Our state also has the lowest recipiency rate: in 2019, fewer than 10 percent of jobless residents received unemployment benefits, compared to 26 percent nationwide.
Sadly, North Carolina isn’t alone in slashing benefits. In Florida, where unemployment assistance is named “re-employment assistance,” the weekly maximum benefit amount in 2023 was $275 a week for 12 weeks.
Benefits are linked to geography, not need. West Virginia, whose cost of living is relatively low, offers up to $662 a week for 26 weeks, but New York, whose living costs are among the highest anywhere, maxes out at $504 a week for the same duration. Even among states where up to 26 weeks’ assistance is available, some use a sliding scale based on a worker’s earnings history to determine the number of weeks of eligibility. In Georgia and Montana, that can mean workers are eligible for as few as six and eight weeks of assistance, respectively.
These are best-case scenarios. For those with low wages to begin with, the numbers are even worse. In Colorado, the minimum amount of unemployment assistance is $25 a week; in Nevada, $16 a week; and in Hawaii, just $5.
These issues are particularly relevant when workers supplement incomes with gig-based or part-time work. Gig workers and freelancers are typically aware that their status as 1099 workers, or independent contractors, disqualifies them from unemployment benefits. But polyemployment, or working multiple jobs, can also be disqualifying. Workers who lose their main source of income, but stick with a side hustle, may be disqualified from benefits because they’re ostensibly still working.
Pew Foundation research suggests that roughly 16 percent of American adults engage in gig work, while nearly 8 percent hold multiple W-2 jobs. Between the growth of worker misclassification as 1099 workers, gig-ification, and underemployment, even fewer workers may meet the threshold for being “officially unemployed.” As a result, the social safety net of unemployment assistance — which already had holes — is being shredded.
In 1937, the Social Security Board described unemployment insurance as “more equitably distribut[ing] a part of the unavoidable cost of unemployment.” Employers laid off workers, yet the costs of joblessness were borne by families and local communities. Thanks to our state-controlled unemployment system, those costs are increasingly being outsourced to workers.
The federal government is also at fault. Although states create and run their own unemployment programs, each plan is approved by the secretary of labor, suggesting the need to tighten standards. States that have low recipiency rates, or those that provide the jobless with too little, should be penalized accordingly.
We need to move beyond the outdated notion of a one-worker, one-job model. Unemployment insurance systems should be updated to allow workers to apply for benefits based on income loss. Gig platforms should reclassify workers as W-2 employees or offer them unemployment benefits.
The goal of unemployment assistance was to avoid another cataclysmic unemployment situation like the one that resulted from the Great Depression. By that metric, it works. But low levels of benefits, partnered with few recipients, may simply lead to micro depressions, which can cause macro-damage to individuals and communities.
A safety net exists to catch you if you fall. Why are we cutting holes in it?
Alexandrea J. Ravenelle is an assistant professor in sociology at the University of North Carolina at Chapel Hill and a visiting scholar at the Russell Sage Foundation. Her second book, “Side Hustle Safety Net: How Vulnerable Workers Survive Precarious Times,” will be released later this month.