Finish the Job

Immediately following the Sept. 11 terrorist attack on the World Trade Towers and the Pentagon, Congress moved expeditiously to extend subsidies to the financially precarious airlines. In response to criticisms that many hotel and service workers had suffered job losses, Congressional leaders promised to respond quickly with separate legislation. Six months later, Congress took one small first step by authorizing an additional 13 weeks of unemployment compensation for eligible workers. But Congress needs to finish the job by reforming the entire unemployment insurance system. Inaugurated during the New Deal era, the system reflects compromises with racial, gender, and economic inequities that are intolerable today.

Last fall airline lobbyists argued that events beyond the industry's control had brought it to the brink of ruin. Yet if industry executives, who by some accounts share responsibility for lax airline security, are innocent victims, an analogous argument holds in spades for the service employees thrown out of work.

What sort of safety net awaited these dishwashers, waiters, waitresses, and bell hops? In most states, those who had worked full time for over a year did qualify for 26 weeks of unemployment insurance, but in many of these states benefits did not bring a family up even to the poverty line. More significantly, in most states, including Maine, the system systematically discriminates against part-time workers. A waitress working 20 hours a week for years but whose family responsibilities make full-time work impossible does not qualify for unemployment insurance.

Unemployment insurance is a joint Federal/State program, with the Federal government setting some very general guidelines and providing part of the funding. In practice, states have considerable freedom in establishing eligibility guidelines and benefit levels. The state role in the program is hardly accidental. Southern Democratic acceptance of the whole Social Security package during the '30s was contingent on two major compromises: Domestic and seasonal workers were excluded from old age pension provisions and states were given broad rights to run unemployment insurance. Southern business and agricultural interests regarded these limits as central to the preservation of the "peculiarities" of their labor market. Their concern was that any form of safety net might deter African American domestics and field hands from accepting the near-slave-labor conditions imposed on them in the post-Reconstruction South.

Civil Rights battles in the '50s and '60s extended Social Security more broadly, but unemployment insurance remains a state prerogative. With changing demographic and labor market patterns, the differential treatment of part-time workers takes an increasing toll. In the '50s, roughly 70% of the workforce was eligible for unemployment insurance. Only 43% of unemployed workers received benefits in 2001, and women were less likely to receive these benefits than men (40.0% and 45.9%, respectively). Here in Maine, the figures are 38.6% of men eligible and 37.4% of women.

Just as in earlier struggles over old age pensions, any fight to extend unemployment insurance coverage to part-time workers is a civil rights, economic and even cultural issue. Historically, many unions, often male-dominated, worried more about wage levels and unemployment benefits for full-time workers, who were primarily male. In addition, they made a cultural statement as well: Paid work is all that really matters in a human life and persons unwilling to make a full commitment are not as worthy.

The issue of unemployment insurance for part time workers is especially salient today because many corporations now increasingly use part-time workers as a primary strategy to control labor costs. Most companies do not pay part-timers benefits and they can lay them off without leading to increases in the taxes they pay to fund state unemployment compensation trust funds.

Just as Southerners wanted the freedom to run their own labor markets, business interests today argue that more flexible, less regulated labor markets foster high employment levels, And just as Southerners vilified "lazy" African Americans who "needed discipline" to work, the business press now bemoans the fate of European peers hamstrung by laws that make it hard to lay off workers and vilifies leisure-loving Europeans loafing on their generous pensions and benefits.

Trouble with this picture is that European states with the least restrictive laws, such as Spain, have had the highest unemployment rates in Europe, and Western Europe as a whole had lower rates of unemployment in the '60s and '70s, when labor market "restrictions" were more extensive than currently. By any reasonable accounting, Europe's slow growth and high unemployment today are much more the fault of a central bank that keeps interest rates outrageously high, good for banks but not for the rest of the population.

Even if we have dodged the bullet of deep recession, the mildest recession harms the most vulnerable. If government leaders are serious about seeing welfare recipients become self-sufficient, reform of unemployment insurance must be one of the most important targets. A close accounting of the history and the mindset on which the current system is based should be part of this conversation.

John Buell lives in Southwest Harbor, Maine, and writes on labor and environmental issues. Email

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