Wyden, colleagues introduce bill to overhaul unemployment insurance

WASHINGTON (KTVZ) – Senate Finance Committee Chair Ron Wyden, D-Ore., Senator Michael F. Bennet, D-Colo., and Representative Don Beyer, D-Va., introduced legislation Thursday to update and expand unemployment insurance so that the program better meets the needs of the modern workforce and is ready to respond should America face a future recession.

“The past few years have clearly shown that our unemployment insurance system is broken and doesn’t meet workers’ needs. After decades of sabotage and neglect, this essential social safety net desperately needs an update,” Wyden said. “By bringing unemployment insurance into the 21st century now, we will ensure American workers who become unemployed by no fault of their own will have the help they need as they get back on their feet – and will make sure we’re ready if and when the next economic downturn hits, whether it be years from now or decades from now.” 

"Too many Americans struggle to access essential unemployment benefits as they navigate a patchwork of outdated state systems. Others – often low-wage workers, workers of color, caregivers, and self-employed workers – receive no protection when they lose a job," said Bennet. "Our bill strengthens and expands benefits to help Colorado's workers stay afloat during difficult times and ensures our unemployment system is responsive to changing economic conditions.”

“The pandemic and ensuing economic downturn revealed both the importance of our unemployment insurance system and the desperate need for its expansion and modernization,” said Beyer. “The inadequacy of the system forced Congress to step in and temporarily expand the program, but without permanent reform we are just as unprepared for a major crisis as we were before the pandemic. This bill will make long-overdue improvements to our unemployment system that will help families and the broader economy more easily weather a future economic shock.” 

The Unemployment Insurance Modernization and Recession Readiness Act would:

• Update the federal-state Extended Benefits program so that it will automatically add additional weeks of benefits when unemployment rises.
• Establish new requirements for state unemployment programs to ensure that benefits are adequate to support workers through job loss and that more workers are covered when they lose their job. 
  • This would include requiring that all states offer 26 weeks of benefits, replace 75 percent of workers’ wages, cover part-time workers, and pay workers for their first week of unemployment—the “waiting week.”
• Create new permanent federal programs for unemployed workers, including a $250 per week Jobseeker Allowance that would be available to any unemployed workers not covered by the traditional unemployment insurance system, such as self-employed workers and new entrants to the labor force. 
  • The bill would also include an additional $25 weekly federal allowance for each dependent an unemployed worker has, and provide federal funding to increase unemployed workers’ wage replacement rates to 100 percent during major disasters or public health emergencies.

In the Senate, the legislation is cosponsored by U.S. Senators John Fetterman, D-Pa., Elizabeth Warren, D-Mass., Sherrod Brown, D-Ohio, Jack Reed, D-R.I., Cory Booker, D-N.J., and Bernie Sanders, I-Vt.  

A section-by-section summary is here. 

The text of the bill is here.

Statements of Support

Michele Evermore, Senior Fellow, The Century Foundation: "I applaud Senators Wyden and Bennet for their leadership to address decades of Congressional inaction on common sense reforms that have been recommended by bipartisan commissions going back to 1980 and 1996. We need to apply thoughtful permanent fixes that states have time to carefully implement while the economy is strong to avoid having to implement last minute fixes during economic crises." 

Rebecca Dixon, President and CEO, National Employment Law Project: “The pandemic revealed how absolutely critical unemployment insurance is for supporting jobless workers, their families, and the entire economy. By updating the Extended Benefits program, modernizing regular unemployment insurance, and adding a powerful new jobseeker’s allowance to support workers who are excluded from the current system, the Unemployment Insurance Modernization and Recession Readiness Act will make the system stronger, more equitable, and better prepared for the next recession.” 

Liz Shuler, President, AFL-CIO: "The AFL-CIO strongly endorses the Unemployment Insurance Modernization and Recession Readiness Act of 2023. There was no clearer example of the need to upgrade and modernize our decades-old unemployment system for supporting laid off workers than during the 2020 pandemic recession. This legislation expands unemployment coverage, raises benefits and establishes safeguards in the event of rising unemployment. This bill ensures that our country is prepared to manage a potential future economic downturn."

A letter of support from over 100 organizations is here.