America Does a Much Worse Job Helping the Unemployed Than Other Countries

December 21st 2016

Thor Benson

Being unemployed is bad, and it's especially bad in the United States.

That's because American unemployment insurance programs are terrible.

Compared to other Western nations, the U.S. is too strict with unemployment, and it hurts our citizens.

Only 23 percent of people who become unemployed in America qualify for any assistance.

That means the vast majority of Americans who lose their jobs end up without any income or any help from the government.

Seven out of 10 Americans have less than $1,000 in their savings accounts, so that doesn't leave much money to live on.

Eight states offer unemployment insurance for less than 26 weeks, according to the Center on Budget and Policy Priorities.

Most states provide the benefit for exactly 26 weeks.

Only two states — Montana and Massachusetts — offer unemployment for more than 26 weeks.

unemployment states

Meanwhile in the rest of the Western world ...

Parts of Europe take care of their citizens much better.

Germany provides a citizen who loses his job unemployment assistance for at least a year. Someone over 58 can receive it for up to two years.

France offers unemployed persons under 50 years old assistance for two years. Someone over 50 can receive it for three years.

Both countries provide assistance that matches 60-65 percent of whatever a person made at his most recent job.

food line

Why this matters.

About 63 percent of Americans "say the average working person in the U.S. has less job security now than they did 20 or 30 years ago," according to a Pew poll from October.

Americans see manufacturing jobs going oversees, automation replacing workers, and low investment in small businesses, and they're worried there isn't enough work.

This is one of the big reasons so many Americans have turned to freelancing. If you can't find a good job, create a good job.

It's important to point out that there's more to unemployment assistance than just preventing someone from running out of money.

Providing substantial unemployment assistance does not stop people from looking for work, a 2013 study from the University of Edinburgh found.

Rather, assistance enables a person to look for work without worrying about whether she can afford to eat lunch.

"The study I wrote a few years ago found that, during the Great Recession, the effect of extended [unemployment insurance] on job-finding was quite small," Jesse Rothstein, a former Labor Department chief economist who is now a professor at the University of California, Berkeley, told ATTN:.

It can take significantly longer to find a job during hard times, so job-seekers can suffer if unemployment assistance time limits don't adjust for that.

"I personally believe that unemployment benefits should be more generous, at least in the less generous states with lower replacement rates," Rothstein said. "They should also be designed to get more generous in recessions, when the usual concerns about over-generous benefits are much less of an issue."

The U.S. also does a bad job helping people train for work or find work after they lose a job, Rothstein said. He would like to see that change.

Unemployment may currently be on the decline, but that can always change. People will always lose work, so it's vital to make sure they're taken care of.