Racial Disparity in Unemployment Insurance Benefits: An Overview

Racial disparity is a public problem that exists since ever. What can be the reason that two individuals work for the same hours a day and are paid the same wages but they don’t receive the same unemployment insurance benefits? Reports suggest that people moving long distance with pricingvanlines.com state government policies as one major reason for relocation. One of them gets almost twice in retirement as the other; this is what happens with unemployment benefits. Social Security has two different levels of benefits for White and Black workers.

The effect of pandemic:

Millions of people have lost their jobs during the pandemic and during this crucial period, people have discovered that unemployment insurance is not a single public program. The Unemployment Insurance program is not a single public program but is a set of 53 distinct programs. Every state follows a different method of calculating unemployment insurance as their formula of calculating a worker’s past earnings is different.

The federal government suggests that a worker should get half of his lost wages but not all states follow the same rule, where Massachusetts provides the highest benefits, Mississippi is providing the least. When we look into the details of this state variation, we come to know that this is the basis of the difference between the Black and White benefits. The Black population is not evenly distributed across the U.S. Six states including South Dakota, Idaho, Maine, Wyoming, Vermont, and Montana have almost no Black population. More than a dozen other states have less than 0.5 percent Black Population. Texas, Georgia, and Florida are three states that have a considerable number of Black people.

The wider picture:

The irony is that the states with more Black population provide fewer unemployment benefits and it clarifies that the Black people are less financially supported. And if we look at the larger picture, all workers living in less generous states, whether they are Black or White, are not given full benefits and are ill-treated. But these less generous states have a maximum population of Black people.

If we calculate the average maximum unemployment benefit for all Black and white workers of the U.S. based on their state, Black workers get $40 less per week that comes out to be $1040 for 26 weeks which is almost equal to the stimulus checks sent as part of the CARES Act. Also, these figures are not even real figures. Some surveys show that Black workers are less likely to receive any unemployment benefits as compared to White workers. Though this disparity cannot be explained, sometimes Black people do not get any unemployment benefits at all.

The Black workers living in less generous states are not a part of modern policymaking but administered by the New Deal back in the 1930s. Unemployment benefits are administered by states while Social Security is administered by the federal government. At the time of the passing of New Deals legislation, a bargain was required between Southern and Northern Democrats where Northern Democrats wanted worker support, Southern Democrats did not want to provide benefits to the Black workers. So, the relief programs were kept under state control for both Democrats to accomplish their motives.

Though CARED Act filled in many inequalities but the problem is arising again where people are facing racial disparity. Structural racism in the U.S. is playing a vital role in benefit disparities. Black workers are more likely to be unemployed yet don’t get equal unemployment insurance benefits. They face discrimination right from applying for employment & health benefits to processing their application. They even face difficulty in satisfying the eligibility criteria for availing of benefits.

Racial disparity in the U.S.

Racial disparity in the U.S. has always been a matter of concern and there have been many calls to reform unemployment insurance. Though this alone cannot remove racism but can be a stepping stone to a more powerful and equal society.

Although the situation is saddening, the modern companies are trying their way out of the problem. More and more organizations are coming up with ways to make their workplaces more secure, without any traces of racial disparity. Moreover, the government is trying to offer more fair unemployment benefits to all types of people who are currently unemployed in the United States.

The effects of the Pandemic on the national and international economics have been severe. A large chunk of people has run out of job and many of them haven’t still got another chance to revive. In such a scenario, it is important that there are fair relocation policies, unemployment benefits and other support policies for the employees by the government as well as the businesses.