Depression-era unemployment program fails to reach many jobless

WASHINGTON -- As many as 4 million people could receive extended unemployment benefits under the economic recovery package signed into law by President Bush. But Anthony Walker, who was laid off by a parking garage in January, will not be one of them.

Walker is among the 43 percent of unemployed workers ineligible for even regular benefits because of what some experts say is a Depression-era system that fails to meet the needs of today's work force.

"In most states, unemployment insurance isn't a true safety net, but a series of gaping holes loosely strung together," said Jeffrey Wenger, a labor economist at the Economic Policy Institute in Washington.

The unemployment insurance program is a federal and state partnership that pays benefits to unemployed workers who have lost jobs through no fault of their own.

Benefits are collected from employers through payroll taxes, and provide partial, temporary replacement of lost wages. States set their own eligibility and benefit levels with federal guidelines. Only two states directly tax workers.

Walker mistakenly thought he would get financial help when he was let go.

"I didn't ask to be laid off," said Walker. He held a $7.15 an hour job at a Silver Spring, Md., parking garage.

But he did not qualify under the formula most states use to determine eligibility and benefit levels. The first four of the last five completed calendar quarters are counted, and a worker must be employed for at least two quarters during that time and wages must meet a certain level.

The unemployment office says Walker was not employed at the garage for two full quarters during the eligibility period.

"Why am I being penalized?" he said. "I did not quit. I did not get fired."

Although the yearlong recession is over and companies started adding employees again last month for the first time in seven months, people looking for work should not count on immediate relief.

Jobs not plentiful

Even with the unemployment rate dropping to 5.5 percent last month, jobs are not plentiful yet.

Economists say companies will remain skittish about hiring back workers until a full economic recovery is under way.

Today's work force has more part-time workers, temporary workers, contingent workers, contract workers and seasonal workers than ever before, yet the unemployment insurance system has not changed.

It was created in 1935 as part of the Social Security Act to help unemployed workers and to stabilize the economy by giving them money to buy food, clothing and other essentials. The payments only cover a portion of lost wages to encourage workers to quickly find replacement jobs.

Nationally, the program replaces about 47 percent of a worker's lost wages. The average weekly benefit is $237.78.