Unemployment Insurance: Low-Wage and Part-Time Workers Continue to Experience Low Rates of Receipt

GAO-07-1147 Published: Sep 07, 2007. Publicly Released: Sep 20, 2007.
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The Unemployment Insurance (UI) program has been a key component in ensuring the financial security of America's workforce for more than 70 years. The UI program is a federal-state partnership designed to partially replace lost earnings of individuals who become unemployed through no fault of their own. In fiscal year 2006, the UI program covered about 130 million wage and salary workers and paid about $30 billion in benefits to about 7 million workers who lost their jobs. The UI program was established in 1935. At that time, most of the labor force consisted of men who were employed full-time in the manufacturing or trade sectors. Since then, the nature of both work and unemployment has changed in fundamental ways. In recent decades there have been increases in the share of low-wage jobs, the incidence of temporary and contingent work, the number of women in the workforce and the number of two-earner families, and the average duration of unemployment. Given these changes in the labor force, questions about the types of workers who are most likely to receive benefits require further investigation. Congress asked that we provide information about the extent to which different groups of workers are being served by the UI program. This current work updates a prior GAO report that assessed UI's role as a safety net for low-wage workers. Specifically, this report examines (1) the overall trend in the usage of UI; (2) the likelihood that low-wage workers will be unemployed and receive UI benefits, especially when compared to higher-wage workers; and (3) the likelihood that unemployed part-time workers receive UI benefits.

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