Unemployment insurance keeps Oklahomans safe, supports the economy

COVID-19 Policy Analysis: As our nation confronts the COVID-19 pandemic, OK Policy will be analyzing state and federal policies that impact our state and its residents during this national health emergency. These posts reflect the most current information available at publication, and we will update or publish follow-ups as new information becomes available.

NOTE: OK Policy is not a state agency and we cannot assist in applying for state services or provide legal advice.

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Since March 15, more than 450,000 people have filed new unemployment claims in Oklahoma. These unemployment claims make up nearly 10 percent of our civilian labor force, and it means that a lot of Oklahomans are out of work. For comparison, we’ve seen more claims since mid-March than we saw in all of 2009, the year during the Great Recession that Oklahoma saw the largest number of new unemployment claims. Unemployment insurance will be a critical piece of our ability to weather and recover from this economic and public health emergency. It is in everyone’s best interest for the system to be robust and accessible to all who need it. 

During a crisis of this magnitude, the system needs to work a bit differently than during normal times. Benefits will increase for a time so people whose workplaces cannot reopen will be able to stay home until it is safe to return to work. Also during this period, more people will be eligible for unemployment benefits because many industries that were especially hard hit by this pandemic are not normally eligible for the program. These temporary adjustments are appropriate in this extraordinary situation, and they will help our economic recovery by assisting affected Oklahomans until they can safely return to work.

How does unemployment insurance work?

No-fault job loss is exactly why unemployment insurance exists. Established in 1935 as part of the recovery from the Great Depression, unemployment insurance helps workers who lose their job through no fault of their own. The program is financed through payroll taxes paid by employers. Workers who lose their jobs apply for benefits; if they qualify, they are eligible to receive a weekly payment to help meet basic needs while they search for a new job. 

The weekly payment is 40 to 50 percent of previous weekly earnings for most workers — enough to provide minimal support during their job search. In Oklahoma, unemployed workers can receive up to 26 weeks of regular benefits, provided they are actively searching for work and accept a suitable job when it is offered.

The unemployment insurance system is an effective safety net for workers in traditional jobs. Unfortunately, it usually doesn’t cover independent contractors, the self-employed, and gig workers as workers in these categories do not have an employer that submits payroll taxes on their behalf. 

How has unemployment insurance been modified to work during a pandemic?

During usual circumstances, the unemployment insurance system requires workers to actively search for a new job and accept the first suitable offer they receive. That’s why the weekly payments are substantially less than what a worker was earning while employed. The pandemic makes actively searching for work potentially dangerous and jobs are not easy to find. This illustrates our need for an unemployment insurance system that makes it possible for people to stay home as much as possible to avoid contracting or spreading the virus. 

To accommodate these needs, Oklahoma has temporarily suspended the work search requirements, though workers are still required in most cases to accept a suitable job offer. In addition, the federal government has created expanded benefits during this public health and economic crisis, such as: 

  • an additional 13 weeks of benefits are available;
  • independent contractors and the self-employed are eligible for the program through the end of the year; and 
  • everyone who is approved for unemployment insurance payments will receive an extra $600 per week through the end of July. 

Expanded unemployment insurance will help workers weather this crisis and help the economy to recover

Additional weeks of benefits are a common federal response to sustained economic downturns, but extending eligibility to the self-employed and additional weekly payments are new. The public health crisis we’re in the midst of is new as well. Stay-at-home orders and mandatory business closures have changed the face of unemployment. For example, personal service providers (cosmetologists, manicurists, massage therapists) and gig workers (especially those who work for rideshare companies) were especially hard hit by the pandemic. It makes sense to include those workers in unemployment relief in these extraordinary times. 

The additional $600 per week also makes a lot of sense right now. When effective crisis response means people should stay home as much as possible, half of a family’s usual earnings will not make that possible. This extra money will bring the average worker back up to full earnings for a little while, allowing them to stay home and safe until a suitable job is available. This money is especially important for low-wage workers, as they are the least likely to have enough money saved to meet their basic needs for more than a week or two while out of work. This boosted weekly benefit will not last long, but it is important that it be available right now to keep families afloat until it is safe to return to work.

Keeping people safe is the most important thing right now, and this modified unemployment insurance system is an important part of that goal. The more people interact, the more likely it is that COVID-19 will continue to spread in our communities. Making sure everyone has adequate resources to minimize their interactions with others will make us all safer now. When it’s safe to do so, we will go back to work.

ABOUT THE AUTHOR

Courtney Cullison joined OK Policy in March 2017 as a policy analyst focusing on issues of economic opportunity and financial security. Before coming to OK Policy, Courtney worked in higher education, holding faculty positions at the University of Texas at Tyler and at Connors State College in eastern Oklahoma. A native Oklahoman, she received an Honors B.A. in Political Science from Oklahoma State University, and an M.A. and Ph.D. with emphasis in congressional politics and public policy from the University of Oklahoma. While at OU, Courtney was a fellow at the Carl Albert Congressional Research and Studies Center. As a professor she taught classes in American politics, public policy, and research methods and conducted original research with a focus on the relationship between representatives and the constituents they serve.

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