STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - July 25, 2007)
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Mr. KENNEDY. Mr. President, today I am pleased to join my colleagues Senators SNOWE, ROCKEFELLER, WARNER, and CANTWELL in introducing the Unemployment Insurance Modernization Act, a bipartisan proposal to reform our unemployment insurance system.
In today's troubled economy, too many working families are just one pink slip away from falling into poverty. The most recent recession hit workers particularly hard, wiping out millions of good jobs, many of which never came back. Today, almost 7 million Americans are unemployed.
Fundamental shifts in the economy, including globalization and jobs being shipped overseas have caused declines in entire industries, with the result that large numbers are losing their long-time jobs and struggling to find new opportunities for work. But their options for new jobs are limited, and nearly one in six unemployed Americans are out of work for longer than 6 months. Another 1.5 million unemployed workers aren't even counted in the official unemployment statistics, because they have become frustrated and have given up their job search.
The Federal Unemployment Insurance program was created in the Depression-era to help keep workers out of poverty between jobs. It has been a bedrock of security for working families in difficult times, providing much needed benefits to millions of workers each year. It has helped them pay the rent and put food on the table when they lose their job and face long periods of unemployment. It also has helped reduce economic fluctuations by building up a reserve of funds in good economic times that can be used as a cushion to soften the blow of job losses during recessions.
The problem is that the current unemployment insurance system has not kept pace with the changing economy and left millions of Americans without benefits. In 2006, just 35 percent of unemployed Americans received unemployment benefits. In addition, today's much more mobile workforce means that employees are now at greater risk of suffering unemployment.
These problems particularly affect low-wage workers. According to the Government Accountability Office, low-wage workers are only half as likely to receive UI benefits as other unemployed workers, even though low-wage workers are twice as likely to be unemployed.
Modernizing unemployment insurance cannot single-handedly overcome all of the economic challenges facing our Nation, but it's a critical step in dealing with the hardships so many working families are facing.
The current unemployment insurance program was designed as a partnership between states and the Federal Government. States are given extraordinary flexibility to tailor the program's benefits to their unique situations, and many of them have been the laboratories of democracy in improving their unemployment insurance systems. Their experiments have often been successful in making the system more responsive to workers' needs.
Some have improved coverage for low-wage and part-time workers. Others have made their systems more family-friendly, or have helped dislocated workers expand their skills through training.
Our Unemployment Insurance Modernization Act builds on these successes by offering States strong financial incentives to adopt the best of the new programs.
First, the bill encourages States to cover more low-wage workers. In 30 states, many unemployed low-wage workers are not eligible for UI benefits because their most recent earnings are not counted. But failure to count these earnings may deny benefits altogether to some workers, and reduces the amount that many other workers receive. Our bill provides incentives for States to fix this unfair practice.
Changing family life has also left many workers unable to collect unemployment benefits. Today, two-wage earner families are the norm, not the exception. When a parent moves to a different city to take a new job, the spouse usually has to quit work as well to keep their family together. But spouses cannot collect unemployment benefits in most States, nor can victims of domestic violence, if they have to leave work to find safety elsewhere, out of reach of their abuser. Our legislation encourages States to provide benefits in these cases as well.
In addition to expanding the eligibility for benefits, our bill also supports state efforts to reemploy workers laid off by declining industries. Currently, the Trade Adjustment Assistance Program offers retraining benefits to some workers directly affected by trade, so that they can learn new skills and find worthwhile jobs in other industries. But employees who are only indirectly affected by trade often receive no benefits. Our bill helps close that gap by encouraging States to offer additional benefits to unemployed workers attending State-approved training programs.
Finally, our legislation provides needed funds to States to manage their unemployment insurance programs and reach out to workers. Many States are now forced to shut their unemployment offices because they can't afford to keep them open, leaving unemployed workers without any counseling to find new work or learn about the benefits available to them. These employment offices also provide a way for other programs, such as Trade Adjustment Assistance, to reach out to affected workers.
The Unemployment Insurance Modernization Act will provide greater security to countless working families who are being left in the cold today. It will help long-term unemployed workers get the training they need to find new jobs. It will give States the resources and flexibility they need to revitalize their programs and serve working families more effectively.
I commend my colleagues on both sides of the aisle who are joining to introduce this important legislation. We all agree that now is the time for these reforms. In the global economy, it is more urgent than ever for every American worker to be able to contribute to the economy. To achieve that goal, we need to make sure that all unemployed workers have the support they need to get back on their feet and rejoin the workforce. Our future prosperity depends on it.
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