#AceFinanceReport – USA:April.22: Tens of billions of dollars in debt. Cuts to jobless aid that have been called “historic and disturbing.” Unemployment insurance trust funds that are still clawing their way back to solvency.
This is the Great Recession’s legacy for the nation’s unemployment safety net. The sustained downturn and spike in joblessness stressed state programs to an extent not seen in decades, requiring emergency federal aid. Now, unemployment nationwide has fallen to 5.5 percent and the amount of unemployment benefits paid in the states has dropped to pre-recession norms in many cases.
Federal jobless aid to extend benefits expired last year.
Yet many state unemployment insurance trust funds still face a deficit. Those that are in the black often have balances below pre-recession peaks. And many states are paying less in benefits. The result is a safety net significantly weaker than it was before the recession.
Six years after the end of the recession, many state officials and labor analysts are concerned about what will happen to jobless benefits once another economic downturn arrives.
“When it comes, the (unemployment) program is going to be weaker and less effective than it was in the last recession,” said Wayne Vroman, a senior fellow in the Center on Labor, Human Services and Population at the Urban Institute.
“The consequences are going to be there in the next recession, and it will be obvious.”