Less for More

As the unemployment lines are growing longer across the country, the jobless are discovering a painful lesson of Reaganomics: fewer of them are eligible for unemployment benefits, and many of those who do receive benefits are getting smaller checks. Begun in 1935, under the auspices of the Social Security Act, unemployment compensation is funded by a combination of federal and state payroll taxes imposed on employers. Though benefits vary, most states give eligible workers a maximum of 26 weeks of unemployment pay. The checks, which are based on workers' previous earnings and length of employment, range from a weekly maximum of $222 in Alaska down to $90 in Alabama. By comparison, the average weekly manufacturing wage in September last year was $288.

Congress raised unemployment benefits considerably during the 1970s. If joblessness among workers covered by unemployment insurance reached 4% within a state, or if the rate nationwide topped 4.5%, for example, an additional 13 weeks of benefits were paid out; Washington and the states split the extra costs evenly. Under the Trade Adjustment Assistance Program, as amended in 1974, employees who lost their jobs because of foreign competition, such as auto and steel workers, received up to 70% of their wages for a maximum of 18 months. These jobless workers, whose numbers reached 281,000 in fiscal 1981, also received regular unemployment checks, and some of them wound up with more money after taxes than they had when they were working.

Then came the Reagan revolution. As part of its budget-cutting efforts, the Administration last August abolished the national unemployment trigger that provided an additional 13 weeks of benefits, but kept the individual state triggers intact. It is estimated that 640,000 workers will not get such payments during fiscal year 1982, for a savings to the Government of $690 million. Also stopped were unemployment benefits for servicemen who choose not to reenlist. The rationale was that military service during peacetime is an occupation, and those who leave voluntarily are in effect quitting their jobs. Finally, the budget cuts virtually eliminated the extra benefits paid under the Trade Adjustment Assistance Program. In December 1980, some 233,000 jobless were given such aid. Only 12,100 received it last December.

On Oct. 1, all states must raise their own trigger rates of unemployment that make the jobless eligible for 13 extra weeks of benefits by one percentage point, from 4% to 5%. In addition, new regulations will also require that any person drawing extended benefits must have worked at least 20 weeks during the previous year before losing his job; there is no such minimum requirement now. The logic behind these reductions in unemployment benefits was simple enough: the employer taxes that pay for them no longer cover the costs.

The most ironic cut of all involves the firing, for budgetary reasons, of more than 18,000 employees from the public employment service, which helps the unemployed find jobs and which is linked to the unemployment insurance offices that process claims. Since the firing is being done by seniority, many specialists in job placement may be reassigned to process benefit claims. The probable result: more errors and long lines for those trying to pick up their checks. The lines could well include out-of-work employment service clerks who once were on the other side of the counter.

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