The pandemic showed the flaws in the American approach to help the unemployed. Alternatives exist.

By Neil Irwin

For years, people who study unemployment benefits have warned that the American system of jobless insurance was too antiquated and clunky to meet the needs of workers in a time of economic crisis.

To understand what they were worried about, consider this bizarre timeline since the start of the pandemic:

Last spring, when the economic shutdown caused millions to lose their jobs, many state systems were so clogged that people were unable to receive jobless benefits for weeks, sometimes longer.

Congress concluded that it would be technologically impossible to calibrate extra benefits to replace every jobless person’s full income, so it took a blunter approach: Lawmakers tacked an extra $600 per week onto unemployment checks. The result, by one estimate, was that 76 percent of recipients made more than they earned when they were working.

At the end of July, that $600 supplement expired, falling to zero. But the economy remained in dire condition with jobs nowhere to be found — leaving millions of jobless people in the lurch.

Then, early this year, $300 per week was tacked on. It is set to stay there until September, even as Americans are vaccinated on a mass scale and as the economy starts to roar ahead.

So while unemployment insurance has fulfilled a vital role of keeping families afloat financially — and preventing overall demand for goods and services from collapsing — the stop-and-start cash sequence has been reflective of neither individual recipients’ lost income nor the state of the labor market.

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