Unemployment benefits saw unprecedented expansion during the pandemic. Is the system working?

Man in a mask carrying a sign.
Carlos Ponce joins other demonstrators participating in a protest asking senators to support the continuation of unemployment benefits on July 16, 2020, in Miami Springs, Fla.
Joe Raedle | Getty Images

Millions of Americans signed up for unemployment benefits during the recession brought about by the COVID-19 pandemic.

For the first time, unemployment benefits were also expanded to include the self-employed, gig workers and other contingent workers.

And the federal government provided sizable boosts to weekly unemployment insurance payouts across the United States.

But these changes to the unemployment insurance system have become controversial after disappointing job gains as the economy begins to reopen. Employers have struggled to find workers, and critics blame generous unemployment benefits for the lack of potential hires.

Guest host Chris Farrell asked two unemployment policy experts: How well has the unemployment insurance system worked during the pandemic, and what reforms would make the system better?

Indivar Dutta-Gupta, the co-executive director of the Center on Poverty and Inequality at Georgetown University, told Farrell that research suggests the recent changes to the system had only positive effects on stability for workers and the economy.

“Not one study could really find any discernible negative effect,” Dutta-Gupta said.

Adriana Kugler, a professor at the McCourt School of Public Policy at Georgetown University, said critics of the benefit increases should remember that the dollar amounts in question are relatively modest.

Even including boosts from the Federal Pandemic Unemployment Compensation program, the average American family of four would receive only $26,400 from a year of unemployment benefits. “That doesn’t exactly make you rich,” Kugler said.

Dutta-Gupta expressed concern that some states are rolling back the recent changes to unemployment insurance.

“We are doing far better than peer countries in our recovery from the pandemic, thanks in large part to fiscal spending on beefier unemployment insurance,” Dutta-Gupta said, “and yet we don’t seem to be learning our lesson.”

Dutta-Gupta and Kugler highlighted various parts of the unemployment insurance system they say are in need of reform.

Many unemployed workers found it difficult to navigate the arcane federal-state system that in many cases proved under-resourced and outdated. Some workers without recent full-time employment fell through the cracks due to complicated qualification rules. And structural racism persists in the construction of the system as a whole.

The work of undertaking these and other reforms is urgent, and “it needs to be done before the next recession,” Kugler said.

Guests:

  • Adriana Kugler is a professor at the McCourt School of Public Policy at Georgetown University. She was the chief economist of the U.S. Department of Labor from 2011 to 2013.

  • Indivar Dutta-Gupta is the co-executive director of the Center on Poverty and Inequality at Georgetown University. He works on developing and advancing policy recommendations that alleviate poverty and inequality, advance racial and gender equity and expand economic inclusion.

Use the audio player above to listen to the full conversation.

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