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Kansas Unemployment Insurance Needs to Be Improved
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A 2001 study by economists Heather Boushey and Jeff Wenger of the Economic Policy Institute shows that unemployment
unemployment benefits fall short of covering basic family budgets.
For UI to function as insurance against poverty, workers must receive benefits that meet these basic family budget levels. Unfortunately, in nearly all cases benefits fall
short of need.
The study looked first at UI adequacy for single-parent families3 with a median-wage
worker residing in the median community in each state in terms of basic family budget. For these families, UI benefits fall short of covering basic budgets in every single community; the average monthly shortfall is
$1,317. Every month of unemployment for these families means incurring that much more debt or facing the prospect of eviction, food shortage, or utility cut-off.
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Adequacy of unemployment benefits, single-parent family with two children under 12*
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Wichita Kansas
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Basic Family Budget
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$2,482
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Unemployment Benefit
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$1,117
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Income Gap
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-$1,364
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They also looked at the adequacy of unemployment for two-parent families where one spouse’s UI benefits are combined with the earnings of a spouse employed part time.
For these families, total family total family income falls short of covering basic family budget needs in 396 out of 433 communities, or 91% of the United States.5 On average, this family’s budget needs are $334 greater than its combined UI and
part-time income.6
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Adequacy of unemployment benefits, two-parent family with two children under 12
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Wichita Kansas
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Basic Family Budget
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$2482
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Unemployment Benefit + Part Time Job
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$2127
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Budget Gap
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-$355
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Since UI benefits, even when combined with the earnings of a spouse employed part time, will not cover the family budget, families must find other ways to make ends meet.
The hard tradeoffs include increasing the hours worked by the part-time spouse, drawing down any existing savings, or going into debt. In a recession, however, it may be difficult for part-time workers
to increase hours of work, and single-parent families do not have access to this possibility at all. As for relying on some sort of emergency “nest egg,” most families have none (note also that basic
family budgets do not include any “spending” for savings). Savings rates for American families are at historic lows, and many were deeply in debt before the current recession. The current average
outstanding consumer debt per worker is nearly $5,000, making going into further debt an impossibility for many families. Making cuts in the family budget would mean living with inadequate food,
eliminating health insurance, or doing without other necessities such as transportation, clothing, or utilities. Since the family budgets don’t include money for restaurant meals or entertainment, and
perhaps underestimate health insurance costs for the unemployed, there is little fat to trim.
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A better option for shielding unemployed workers and their families from these undue hardships is to increase the generosity of UI benefits and distribute
them more progressively
Coming Up Short. Economic Policy Institute Issue Brief #169 October 2001
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©2002-2006 Wichita/Hutchinson Labor Federation, AFL-CIO
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Protect Workers’ Right to Form
Unions & Bargain
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The right of America’s workers to form unions and bargain is under
constant attack.
Help preserve these embattled rights this International Human
Rights Day by signing our petition to protect the freedom to form unions.
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