Recession exposes big holes in jobless-benefit system

WASHINGTON (AP) — The government safety net designed to protect laid-off workers from financial catastrophe is falling short, leaving nearly half the 11.6 million jobless Americans without unemployment benefits.

The shortcomings are fueling the recession as an increasing number of workers fall through the cracks and curtail spending. The trend highlights what economists say is a growing need for a 21st century makeover of a program started in the depths of the Great Depression.

Among the key problem areas:

UThere are many more part-time workers now than in 1935, but the program only covers those looking for full-time work.

UMany eligible jobless Americans are shut out because states use an outdated system for calculating their income, making it more difficult to meet requirements.

UUnemployment spells increasingly last longer than the usual 26-week jobless benefits program.

Jobless benefits are essentially mini-financial stimulus packages for struggling American families. Helping laid-off breadwinners continue to purchase goods and services until they find new jobs ultimately bolsters the economy and makes further layoffs less likely.

About $27 billion of the economic stimulus package under consideration by Congress would be used to extend jobless benefits, which vary by state but average about $300 a week. That would cover roughly 3 million Americans through the end of 2009, according to the National Employment Law Project, an advocacy group.