Bill Knight - June 25

Macomb, IL – Rural workers laid off from part-time employment in Illinois and 24 other states could benefit under a provision of the American Reinvestment and Recovery Act (ARRA), according to a new report from the Carsey Institute at the University of New Hampshire.

ARRA - known as the federal stimulus package - offers states the opportunity to receive funding - a total of $7 billion - as incentives to make permanent modernizations to their unemployment insurance programs so that more workers who lose their jobs can receive benefits.

That said, Illinois' General Assembly hasn't taken full advantage of the opportunity. In an agreed-bill process with representatives of the House, Senate and various interest groups, the legislature this spring OK'd two of the Obama administration's four recommended reforms and will receive $200 million for the effort. After Congress passed and President Obama signed the stimulus in February, Illinois lawmakers approved more assistance for households with one laid-off parent and one not working, and for families facing a job-related relocation when the trailing spouse must give up his or her job to follow their spouse.

Resistance for the recommendations, including helping laid-off part-timers, stems from concerns that committing to such reforms obligates the state beyond available money - an unfunded mandate.

One legislative aide said, "To give some perspective, that $200 million from the federal government is welcome, but it will only last about two and a half weeks. That's the situation we're in."

Still, the problem remains, and particularly affects rural areas. Many part-time workers are rural residents, according to Anne Shattuck, a Carsey Institute researcher who wrote the report. Rural workers nationwide are more likely to work part-time, she finds, and many states that do not provide unemployment insurance benefits to part-time workers have higher than average proportions of rural residents.

Twenty-five states do provide unemployment insurance coverage for part-time workers, including Iowa, Michigan and Minnesota. Illinois is one of 25 states where people laid off from part-time employment are not eligible for unemployment-insurance benefits.

Shattuck says, "With the rising national unemployment rate, the safety net of unemployment insurance is more critical to American workers than any time during the last quarter century. Modernization of the unemployment insurance program through President Obama's stimulus plan can really help rural families struggling to make ends meet in these bad economic times.

"For the 25 states that do not currently pay unemployment benefits to part-time workers," she continued, "ARRA provides an opportunity to update their policies so that workers can receive critical benefits if they lose their jobs. The American workforce has changed significantly since unemployment insurance was initially adopted during the Great Depression, and new policies are needed."

One in five U.S. workers now works part-time, and only 37 percent of unemployed workers are able to claim regular state unemployment benefits, notes her report, which also finds that rural workers are more likely than others to be part-timers: 21% of all rural workers hold part-time jobs, compared with 20% of suburban workers and 18% of central-city workers.

The most recent U.S. unemployment report from the federal Bureau of Labor Statistics shows the country's jobless rate in May was 9.4%, as another 787,000 people were thrown out of work. Of course, the jobless rate by itself is only part of the employment picture. BLS said, "The number of long-term unemployed - those jobless for 27 weeks or more - increased by 268,000 over the month to 3.948 million and has tripled since the start of the recession."

Together, the jobless, plus folks who are forced to work part-time when they really want full-time jobs and those who stopped seeking jobs are now one of every six workers (16.4%), the numbers show.

Besides rural residents, women in all geographic areas would benefit from expanded unemployment insurance benefits, too, the New Hampshire study finds. Twenty-seven percent of women hold part-time jobs, compared to 13% of men in today's labor force.