Majority of Jobless in U.S. Don't Get Benefits

When the July employment report comes out Friday, U.S. payrolls are likely to shrink by an additional 68,000, according to economists. But a substantial number of those who lose their jobs won't get unemployment benefits -- even though Congress recently took steps to bolster the program.

Only 37% of the country's unemployed received benefits in 2007, down from 55% in 1958 and 44% in 2001, according to the Labor Department. The others have exhausted their benefits, haven't applied or don't qualify.

Those who don't qualify include many part-time workers, people who quit or were fired, and workers who didn't earn enough money in a one-year "base period" that often excludes the most recent three to six months. Worker advocates say the New Deal-era system hasn't been updated enough to reflect an age of more-frequent job changes, more part-time work and falling union membership.

Most states' base period encompasses the first four of the last five completed quarters. Before records were computerized, it was difficult to tabulate more-recent earnings.

Unemployment insurance was "intended to largely support traditional male breadwinners in traditional, manufacturing-type jobs," says labor economist Lawrence F. Katz. "It's not necessarily set up for people who have multiple jobs, for people who work in and out of different jobs, for people in part-time work."

In Ohio, people filing for unemployment insurance need to have an average weekly wage of $206 -- 27.5% of the state average -- in their base period in order to qualify. That excludes many low-income workers forced to work part time, such as people at temp agencies with erratic work schedules.

"You have people who already weren't earning very much to begin with, but when they lose their job, they need the protection of unemployment benefits to keep them from becoming homeless," says Anita Myerson, a lawyer at the Legal Aid Society of Cleveland.

The economy has shed 438,000 jobs so far this year, leaving 8.5 million Americans unemployed. The long-term unemployment rate rose 37% in the past 12 months. Congress in June passed a temporary 13-week extension to unemployment benefits. But the federal program adds a new requirement: Workers need to have been employed for at least 20 weeks during their base period to qualify for the extension.

Critics say the unemployment-insurance program covers too few people and unfairly excludes women and low-income workers who can work only part time because of family requirements or don't make enough money to qualify. Fewer than 15% of low-wage workers get benefits, according to the Government Accountability Office.

Many businesses resist an expansion of coverage, fearing higher taxes amid tough economic times and arguing that beleaguered state trust funds can't handle more payouts.

Caught in the middle are millions of unemployed workers who don't receive benefits.