Policy Issues: An Overview

Abstract

The federal-state program of unemployment insurance (UI) is well established among economic institutions in the United States. It has an undeniable influence throughout the economy, affecting personal incomes, employer taxes, federal-state relations, and interstate compe tition for industrial production and employment. The UI program serves a variety of functions that help frame employment relations between Americans. Over the nearly sixty years since the program's inception, these functions have come to be accepted and relied upon by both workers and employers. UI partially replaces lost income for individual workers who are involuntarily unemployed, and, in the aggregate, it helps to maintain purchasing power during economic downturns. It reduces the dispersal of skilled workers when employers impose temporary layoffs and helps prevent the breakdown of general labor standards during such periods. Some features unique to the UI system in the United States are