From CNBC: 2024-08-09 10:11:15

Despite fears of a U.S. recession, experts warn that the unemployment system is ill-equipped to handle another economic downturn. Cracks in the system were exposed during the pandemic, with delays, fraud, and administrative issues hindering benefit payouts to workers in need.

The pandemic highlighted major flaws in the unemployment insurance system, including technology failures and administrative challenges, as emphasized by a recent report from the National Academy of Social Insurance. States vary widely in benefit amounts, duration, and eligibility criteria, making it difficult for workers to navigate the system.

With the U.S. unemployment rate inching upward, policymakers are urged to address the shortcomings of the unemployment insurance program during stable economic times to ensure it can effectively support workers during periods of economic hardship. Experts suggest reforms in administration, technology, and funding to modernize and improve the system.

Efforts are underway to reform the unemployment insurance program, with bipartisan legislation proposed in July to address various aspects of the system. Policymakers are encouraged to enact changes to ensure the system can effectively support workers in future economic downturns, emphasizing the need for proactive measures to strengthen the safety net for job seekers.

Read more: Unemployment insurance program is unprepared for a recession: experts