Unemployment insurance: A safety net in need of repair

The benefits awaiting America’s unemployed are outdated and skimpy COMPARED with the systems in other industrialised countries, the American unemployment-insurance (UI) scheme pays lower benefits for less time and to a smaller share of the unemployed. In expansions this encourages the jobless to return quickly to work—and unemployed Americans do indeed work harder at finding jobs than their European counterparts (see chart). But in recessions, when there is less work to return to, it causes hardship. Like America’s training system, UI is ripe for attention from the incoming Obama administration. Like much of the social safety net, the current UI system was a product of Franklin Roosevelt’s New Deal. States were prodded to provide benefits in accordance with federal guidelines; in return the federal government paid their administrative costs. But the system has not kept up with changes in America’s labour force. ... (link)