The Great Recession has presented enormous policy challenges since it began in December 2007. We discuss here the record payout of Unemployment Insurance (UI) benefits. The UI program represents one of the most consequential policy responses to the hardships imposed on workers and communities by high rates and long spells of unemployment.
This policy brief explains why UI benefits provide one of the most effective and efficient means to address economic woes imposed by joblessness. In particular, unemployed workers quickly receive funds to help make ends meet and aggregate UI spending acts as an automatic stabilizer for the larger economy. In California, UI benefits and extensions helped approximately 1.5 million workers and their families afford basic necessities in 2009, kept nearly 500,000 Californians out of poverty, and resulted in spending that supported 161,000 jobs in the state. The severity of the crisis would have been deeper, unemployment would have been greater, state and local tax revenue would have been lower, and the economic hardship faced by families would have been more severe without this vital safety net.