Signed into law today, the $787 billion stimulus package places our bets for the economy’s health on a plan promising job creation, government investment, and tax cuts. Another key component of the economic prescription is the expansion of public benefits programs needed to protect the most vulnerable families from falling deeper into poverty and essential to promoting growth.
To achieve their full remedial potential, these benefit program expansions must come with the assurance that claimants are receiving the full benefits to which they are entitled. Unfortunately, this is where the stimulus fell short. The Washington Post reports that, at least in the area of unemployment compensation, people applying for benefits are finding it increasingly difficult to obtain them.
The Post reports that more than a quarter of workers applying for unemployment compensation are having their claims challenged by their former employers, with challenges reaching record highs in recent years. And it is no coincidence that this rise in challenges, partly a result of companies looking to resist cost hikes in the form of unemployment claims liability, comes at a particularly bad time for families nationwide and for our economy as a whole.
Nationally, 463,715 people filed initial claims for unemployment compensation in the last quarter of 2008. According to the Center for American Progress Action Fund, unemployment compensation replaces only 35% of the average weekly wage in the US, it can serve as a critical financial buffer as workers move between jobs and wait out limited recessionary job prospects.
Not only does unemployment compensation benefit its direct recipients, but we all also profit when laid-off workers collect. The Department of Labor has estimated for every dollar in unemployment compensation that is paid out, an average of $2.15 in gross domestic product is generated. A more solid investment is hard to come by in today’s economy.
The stimulus package recognizes that unemployment compensation will be a necessary component of our financial recovery. However, lawmakers have failed to recognize that with benefit claims being increasingly challenged, funding for legal representation is needed now more than ever to help workers obtain the benefits to which they are entitled.
You can bet that most employers challenging the ex-employees’ claims have their own lawyers, and the Washington Post reports that, in line with the ever-entrepreneurial American spirit, companies are springing up to help companies that are laying off workers to limit their unemployment claims liability. Many employers are also more familiar with the benefits process than is the average worker because employers tend to be repeat players in the system. Along with a serious funding mismatch, these dynamics upset the power balance that should exist between employer and employee when employers challenge workers’ benefits claims. Thus, access to legal representation for employees is a must if the playing field is to be at all leveled.
Unemployment offices are meant to guide claimants through the process, inform them of their rights, and assist them in collecting benefits, but decimated state budgets and increased strain on offices’ resources have made the benefits process increasingly difficult to navigate. This makes it more likely that a worker will get his or her benefits only with the help of an outside advocate working on the claimant’s behalf.
In New York, a survey found that approximately 90 percent of claimants are unrepresented when appealing a loss of benefits and that the success rate of represented claimants in appeals proceedings is almost twice as high as is that of unrepresented claimants.
Included in the stimulus was $35.8 billion to extend and increase unemployment compensation, but, to our detriment, no money was included to ensure that workers applying for unemployment compensation have access to legal help. Nor was money appropriated to fund attorneys for those wrongly denied food stamps, Medicaid coverage or Social Security benefits or to help those facing foreclosure or eviction avoid losing their homes.
Access to a lawyer is the determining factor in too many of the battles low-income people wage against their better-financed employers, landlords, and benefits providers. Increased public funding for legal representation for low-income people in civil cases, especially workers in unemployment insurance claims, is essential. With the Legal Services Corporation reporting in 2006 that its federally-funded legal services providers were able to assist only half of the eligible clients that seek their help, it is evident that legal needs already outstrip supply for those with limited ability to pay. More dollars spent funding benefits programs for low-income people must be coupled with funding for legal representation to provide the best guarantee possible that the funding will reach the intended beneficiaries.
Unless we recognize that legal representation for the poor is needed to ensure that the stimulus’ many programs operate most effectively, we’ll have to cross our fingers and hope that the stimulus money intended to trickle up through our economy gets into the hands of those for whom it was meant.