Mutual Benefit: Why the District Needs to Reform Its Unemployment Insurance Program Now

The District’s unemployment rate topped 10 percent in May, the highest it has been in 25 years.  Sadly, only about a third of jobless workers in DC end up receiving unemployment benefits.

There’s good news, though: The federal government is offering DC $18 million to help these folks get help. So should we try to get the money for them now or wait until later?

Almost all of us, especially given these difficult economic times, would want the help immediately.

Except, apparently, the District of Columbia. The District has yet to make the needed reforms to its unemployment insurance program to get the extra federal funds.

The money is tied to the Unemployment Insurance Modernization Act, part of the economic recovery bill signed into law by President Obama last February.  It gives DC and the states a financial incentive to expand unemployment benefits to three key groups of people who are currently excluded: those who leave their job due to domestic violence or other family reasons, those who lose a part-time job and are looking for part-time work, and those who are permanently laid-off and in need of extended training.  The recovery act also encourages states to expand benefits for unemployed workers with dependents.

To sum up, the feds want to give money to hard-working Americans who lost a job and need a little extra help to get through this recession.

Sound good?

Twenty-five states think so. They have expanded their unemployment assistance to include at least two of the four categories of workers above, which qualified them to receive two-thirds of their incentive money. The District hasn’t yet done so. The deadline to qualify is August 2011.

Why is the District waiting?

DC did get one-third of the approximately $27 million available because it already had in place a provision  allowing workers to count their most recent earnings in their unemployment application, known in technical jargon as the “alternative base period.”

But there’s no reason for DC to be sluggish about getting the other $18 million. (The money can only be used for the unemployment system and can’t be used to cover DC’s budget shortfall.)  Mayor Adrian Fenty and the D.C. Council, particularly Ward 8 Council member Marion Barry, who oversees the Department of Employment Services, need to push DOES to make decisions and bring forth the necessary legislation to put these reforms into place.

It’s a win-win: More District workers receive more money, which they will spend and help stimulate the economy.

Who wouldn’t want that?

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