If a recession comes, don't count on unemployment insurance — states aren't ready to give you benefits

• A new report looks at how America's unemployment insurance system is faring.
• The result: Many states pay little and for fewer weeks, and it takes over a month to get benefits.

When the pandemic first hit, the federal government took an unprecedented step — making unemployment insurance robust and far more accessible to workers traditionally excluded from the benefits.

That of course came with its own hiccups, as overburdened unemployment systems in many states struggled to pay out checks. But, even so, enhanced benefits served as a lifeline for millions of Americans in the middle of an unprecedented time.

If the economy sours now, though, don't expect it to happen again.

"All that was temporary and we can't count any of it coming back," Andrew Stettner, the director of workforce policy and senior fellow for left-leaning think tank The Century Foundation (TCF), told Insider. "We go into this quite honestly with a very concerned perspective, given the level of backlash that there was."

A new TCF report and data dashboard from Stettner and Laura Valle Gutierrez lays out just how full of holes the social safety net is for workers suddenly out of a job. For one, if you're laid off, unemployment insurance likely won't come close to covering how much money you were making. The report finds that the average weekly benefit of $347 accounts for just 39% of how much people were making on average. For comparison, beefed-up benefits last year came in at about $617 weekly, a 79% replacement rate.

And, if you do need to access UI benefits, they might not arrive for a while. The Department of Labor says that an "acceptable level of performance" from state UI systems is distributing 87% of first-time payments within 21 days. Right now, according to the TCF report, just 15 states are doing that. That means that people who lost their jobs and newly qualify for benefits are waiting to receive those benefits for over three weeks in most states.

Enhanced UI also filled in key gaps that are now back in full force. Black workers are more likely to live in states with lower benefits. The enhanced benefits in the wake of the pandemic meant those states relied more on federal assistance, and Black workers there — who were disproportionately impacted by layoffs in the early months of the pandemic — were able to receive UI at similar rates to workers across the country.

Now, four out of the ten states with the largest Black populations rank among the 10 states with the lowest wage replacement rates in the country, according to the TCF report. That means that, without federal assistance or padding, Black workers there will lose out on more wages than workers in the rest of the country.

Many states have cut how many weeks workers are eligible for benefits over the last decade or so. According to the report, 10 states have reduced benefits below the previously standard 26 weeks. In the wake of the Great Resignation, many states also willfully opted out of enhanced unemployment programs in an attempt to get people back to work — a tactic that didn't have any real impact on employment, but did leave workers scrambling to figure out how they were going to survive.

None of that bodes well if there is a downturn coming.

"What we know for sure is that if we do have a repeat of the early 1980s, which is the last time the Federal Reserve Bank took action to really put the economy into recession, the people that lose their jobs, they didn't do anything wrong," Stettner said. He added: "We can't just all of a sudden think that the state unemployment benefit system on its own will be able to handle that either individually or economically."