The collapse of the financial bubble means that a whole interlocking network of millions of construction, real estate and financial jobs will never return, and other industries have been sucked down under debt and bad assets generated by that collapse. Long-term unemployment is chronic in an economy where many of those jobs will never return and workers need to transition to whole new careers.

While the ability of government to quickly replace those jobs is inherently a slow process, the one thing government can do is ease the financial burden on the unemployed going through that process. Unfortunately, in past recessions, budget cutbacks at both the federal and state level have often just increased the suffering of the unemployed.

But this recession is different. Because of massive progressive victories, as I highlighted quickly in this post yesterday, there have been unpredented funds dedicated to support the unemployed, from expanded unemployment insurance benefits to more health care available to basic support expansions for Food Stamps and expanded worker retraining funds. This post will go into a bit more detail on those changes compared to past recessions.

Unemployment Insurance Benefits:   Quietly, because of stimulus money committed at the beginning of the year, America has adopted unemployment insurance benefit periods that approach European levels, with many states facing the highest unemployment giving unemployed workers 99 weeks -- almost two full years -- of benefits.   The dollar level of benefits in states are still too low by international standards but they were beefed up by the stimulus by over $1000 per year.

Still, compared to the normal period of 26 weeks of unemployment insurance and eligibility periods, or slightly longer extensions in past recessions, the long-term unemployed are being guaranteed financial help that can help sustain them during a longer process of finding new work than ever in the past.

As importantly, many workers, whether low-income, part-time or in other classifications, have long been completely excluded from unemployment insurance help.  In fact, because of state rules, only 37% of the unemployed qualified for benefits in the past.  To deal with this problem, the recovery plan included $7 billion in incentive money for states to change their rules to cover low-income, part-time, workers leaving work for family reasons and helping those with dependant family members with additional financial help.

Largely with the leadership of the National Employment Law Project, states passed one of the most sweeping changes in unemployment insurance coverage in history. (The map below is a snapshot from June-- more states modernized their systems since then.)

Medical Coverage for the Unemployed:  While the unemployed have the right to maintain their old employer-based health coverage, they are required to pay the premiums themselves, usually financially prohibitive.  In a radical innovation, the stimulus dedicated  $25 billion in subsidies to help the unemployed afford the COBRA premiums by paying 65% of COBRA premiums for 9 months after a job is involuntarily terminated.   

And for many low-income working families, they also had the option of coverage under Medicaid or SCHIP for their children, help hardly existent in most past recessions.   Because of state reforms, many states now offer Medicaid coverage for parents up to 200% of the federal poverty line and for kids coverage up to 350% of the poverty line.  While other states are below that level, it's worth remembering that it was common for almost all states to provide Medicaid for no family higher than 40% of the poverty line as late as the early 90s.  State-by-state and with federal help such as the SCHIP program, help for low-income families including those facing unemployment has massively expanded in the last two decades.    And beyond Medicaid, a number of states have programs like Healthy NY or Washington State's Basic Health plan that provide additional help for families not qualifying for Medicaid.

To capture some sense of the difference in this recession versus past recessions, take this story saying:

The number of people on Medicaid and state spending on the program are climbing sharply as a result of the recession... according to a survey released today by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured.

In 2002, in contrast, the Center on Budget Policy Priorities reported in this press release in 2003:

"Some 1.2 million to 1.6 million low-income people -- including 490,000 to 650,000 children and large numbers of parents, seniors, and people with disabilities -- have lost publicly funded health coverage as a result."

Or back in 1982 from the Washington Post (no link available)

Medicaid Cuts Put Urban, Public Hospitals at the Crunch Point

Congress reduced the projected cost of the Medicaid program by $932 million, with $327 million to $347 million of that directly affecting hospitals, according to the American Hospital Association...A new survey by the Intergovernmental Health Policy Project in Washington shows that about 30 states have acted to cut services, eligibility or reimbursement to hospitals, doctors and clinics.

Instead of slashing Medicaid as in past recessions, the federal government stepped up and provided large amounts of cash to states so that not only were low-income folks not thrown off the rolls, but new funds allowed states to absorb the new unemployed needed health coverage as well.   Now states are still under financial pressure, but the federal recovery dollars made all the difference this year in assuring that medical coverage was there.

Food Stamps and Other Support:  Beyond unemployment insurance and medical coverage, we have seen a quite large reinvestment in the food stamps program, now called the Supplemental Nutrition Assistance Program (SNAP), with the recovery plan spending $20 billion to the program along with other nutrition help.    This is available to those at around 130% of the poverty line or less, but 36 million Americans, one in eight Americans and one in four children, now benefit from SNAP benefits.   A family of four meeting food stamp eligibility requirements, now receives $668 per month in food help, a lifesaver for many families.    Add in child care, TANF and billions in affordable houisng aid and many of the newly unemployed have help completely unavailable compared to many recent recessions.

Retraining Funds:  States received an additional $3.95 billion provided for the Workforce Investment Act (WIA) to fund job training and employment services, which includes a range of help from peer counseling to rapid-response help in fighting layoffs in the first place.   The recovery act also expanded coverage under the Trade Adjustment Assistance (TAA), which specifically helps workers who lost their jobs because of increased competition from imports.  Instead of restricting help just to goods-producing firms, the new law extends eligibility to trade-affected workers in the service and public sectors, including secondary workers providing services to trade-impacted firms. It added $575 million in funding for training services in FY 2009 and 2010.  Those covered by the TAA receive much higher levels of unemployment support, health care and training benefits.

Claiming Victory:  While no one thinks such support is a good substitute for a job, it's far better than the alternative.   Progressives have fought for decades to strengthen the safety net for the unemployed and, combined with the massive spending support from the stimulus, we have made this recession far less brutal for the unemployed than recessions over the last few decades.

That is a victory we all should be proud of, even as we continue to fight for new programs to put all of the unemployed back to work as soon as possible.