Response of the Public Workforce System to the Great Recession
The second post in a four-part series about the response of America's public workforce system to the Great Recession. Read the first post.
Congress generally responds to recessions by increasing the number of weeks for which eligible unemployed workers can collect unemployment insurance (UI) benefits. As recessions deepen, more workers exhaust their 26 weeks of regular UI benefits, and congressional members get anguished letters from their home districts. As a result, Congress has added temporary emergency benefits to the regular duration of UI benefits in response to recessions in 1971, 1974, 1982, 1991, 2002, and 2008. However, Congress rarely adds funding to the workforce programs that provide reemployment and training services.
The Great Recession was different. In February 2009, the American Recovery and Reinvestment Act increased funding by approximately $5.5 billion for the Workforce Investment Act (WIA) and Wagner-Peyser Act Employment Service (ES) programs, as well as $7.5 billion for the UI program. The WIA program provided job training and reemployment services, while the ES program provided only reemployment services, including job referrals and job search assistance The new appropriations, a response to the enormous increase in the number of unemployed and the unprecedented durations of unemployment, allowed states to improve WIA and ES services to workers. They also served to improve UI administration and benefit eligibility, provide additional services for younger and older workers, and launch new program initiatives.
This new funding for workforce programs, however, was a one-time increase that was not renewed. Because it was part of a recovery package, states were encouraged to spend the money rapidly. As a result, within one year, most of the funds had been used up, but unemployment remained high.