Report Reveals Need to Modernize Maine's Unemployment System

On March 23rd, House Speaker Ryan Fecteau released the following summary of a report by Sandra Butler, Professor of Social Work at the University of Maine. Read the full report from the University of Maine.

LR 1631, sponsored by House Speaker Ryan Fecteau, was crafted with input from Mainers who experienced the system first hand after being laid off or losing business during the pandemic. LR 1631 will modernize Maine’s unemployment insurance program to ensure that Maine workers receive timely and adequate unemployment benefits and that our system runs smoothly to help them get back on their feet.

Throughout January 2021, the Maine AFL-CIO and Maine Equal Justice, with the help of various other community groups and worker organizations, asked Maine people who have used the unemployment system to take a survey describing their experiences applying for benefits during the pandemic. By month’s end there were 321 responses that form the basis of a report published by Sandra Butler, Professor of Social Work at the University of Maine.

While the American economy and workforce have changed dramatically over the last several decades, the UI system has failed to adapt to those changes. This failure has fallen most heavily on low-wage workers; part-time workers; people of color; the long-term unemployed; and those bearing the greatest responsibilities for family caregiving, mainly women. These facts illustrate profound governmental neglect of the UI program over many decades; the taxable wage base on which the employer UI tax is paid has been frozen at $7,000 since 1983, leaving states increasingly without sufficient funds to administer the UI program. This report dramatically underscores the need for a major overhaul of the unemployment insurance system.

Key Findings of the Report:

1. Jobless workers faced unacceptable delays in getting needed benefits while bills piled up and stress increased. Nearly 40% of claimants faced excessive delays (over 30 days) in getting their first UI payment, with nearly 1-in-6 jobless workers facing waits of 3 months or longer.
2. In the majority of cases, employers failed to inform respondents that they might be eligible for UI; sometimes actually discouraging them from applying — both violations of Maine law. Maine law requires employers to give workers a printed notice of how to claim unemployment benefits when they become unemployed. Yet more than half (54.3%) of all respondents did not receive that required information. Of even greater concern, almost 1-in-12 respondents reported that their employer actually discouraged them from filing for UI benefits, in direct violation of Maine law.
3. The majority of respondents relied on help from trusted sources, other than the Department of Labor, to navigate the UI system. Throughout the pandemic, worker and community groups put aside other pressing responsibilities to help anxious and confused constituents navigate a system intended to be their lifeline when unemployed.
4. UI benefits fail to meet the needs of families with children. Maine law currently provides an additional payment of $10 per dependent child up to a maximum of 50 percent of the worker’s weekly benefit amount. This child benefit has not increased for over three decades, while the cost of raising a child has increased dramatically over that period. Of UI recipients who received the child benefit (about 1 in 6 respondents), the vast majority (82%) stated that it was inadequate to help support their child(ren). A family of 4 with two dependent children, receiving an average state UI benefit (with no federal PUC enhancement) got an amount leaving them 35% below the federal poverty line.
5. The Pandemic Unemployment Assistance Program (PUA) has provided welcome help to workers historically shut out from the UI system who were forced to leave a job for compelling family reasons. One-quarter of respondents who were disqualified for leaving a job did so under challenging family circumstances. Under the regular state UI program, these individuals would lose both their jobs and UI benefits since leaving a job would be deemed due to “personal” reasons. Federal PUA provided these families with benefits when the job leaving was Covid-related, like loss of child care.
6. UI is ill-equipped to protect workers increasingly facing part-time and unpredictable work schedules. Respondents whose hours were reduced were asked why they did not receive partial UI. The largest share (40%) reported that they didn’t know that partial benefits were available. Another 9.3% indicated that their employer told them that they were not eligible.
7. Workers experiencing the harsh realities of this broken system are best positioned to help reform it. The most common recommendation of respondents was to hire more staff to answer calls and make prompt benefit determinations. Next most frequent was a call for improved communications related to program rules and procedures, followed closely by the need for better worker training to ensure accurate and consistent responses to questions. A significant number of respondents also asked that technology be improved to make the system more accessible and efficient.