NELP | UNEMPLOYMENT INSURANCE POLICY ADVOCATE’S TOOLKIT 57
percent (rather than 50 percent as usual) of the first week of Extended Benefits. In the
next year, 16 states adopted a waiting week. Since the early 1980s, there has been limited
legislative activity on waiting weeks. Wisconsin added a waiting week in 2011. Vermont
and Delaware added waiting weeks in recent years, but both are scheduled to sunset in
2017.
Question: What are the arguments against waiting weeks?
Answer: Waiting weeks have outlived their intended purposes. Waiting weeks were
originally adopted primarily because states required a delay at the start of a new claim
during which agencies processed UI claims manually to determine the wages needed to
calculate a benefit rate. There is no continued vitality to this rationale. All states, have
wage information available electronically and it is administratively feasible to timely
pay UI benefits for the first week of unemployment.
Most individuals working for a living do not have sufficient savings to sustain their
families’ spending for essential goods and services in the event of job loss. It runs coun-
ter to the purpose of the program to start every worker’s bout of unemployment by de-
stabilizing their family finances. The purpose of UI is to provide prompt replacement of
lost wages, not to drive jobless workers deeper into financial crisis. While waiting weeks
may generate substantial savings to a UI trust fund, jobless workers get no waiting week
on their rent payments, mortgages or utility bills. Jobless individuals and their families
already wait 21 days or more to get their first UI check with an uncontested claim.
Most state UI programs replace only half of worker’s pre-layoff wages at most, with work-
ers who receive maximum weekly benefits getting even lower wage replacement. As a result,
weekly benefits replaced on average less than one third of pre-layoff wages for US workers.
Therefore, asking families to suffer the additional burden of losing even that meager level of
income replacement for an additional week is a recipe for hardship in many cases.
The public policy underlying UI programs is to boost the economy by maintaining
consumer spending during layoffs. Reducing benefits by one week for all workers who do
not exhaust benefits means that more than half of the individuals who drew unemploy-
ment benefits lost one week of benefits.
Finally, the argument that states without a waiting week must fully finance the first
week of Extended Benefits (EB) has also lost its vitality since 1980. The EB program has
been largely ineffective since the 1980 changes because the economic thresholds to
trigger benefits have been set too high. As a result, EB seldom triggers on and the vast
majority of extension benefits during recessions have been paid from special programs
enacted by Congress and have been fully federally funded. In short, the financing
advantage promised to states with waiting weeks has seldom come into play in the 35
years since it was enacted.
Resource:
U.S. Department of Labor, Comparison of State Unemployment Insurance Laws, Chapter 3 “Monetary Eligibility”
(2015),
http://workforcesecurity.doleta.gov/unemploy/pdf/uilawcompar/2015/monetary.pdf.