Laid-off workers are leaving unemployment benefits on the table

Only about a quarter of the people who were out of work in 2022 applied for unemployment insurance, according to recent data from the Bureau of Labor Statistics. A lot of the folks who didn’t apply thought they weren’t eligible.

There are plenty of people who aren’t eligible for unemployment benefits, like gig workers. But “there is undoubtedly a set of people who actually are eligible for benefits and should be getting them,” said Luke Shaefer, a public policy professor at the University of Michigan.

The BLS found that more than half of the people who didn’t apply for unemployment benefits thought they weren’t eligible. 

If you’re laid off, it doesn’t hurt to see what kind of assistance you could receive, said Kathryn Edwards, a labor economist at the Rand Corporation.

“It’s not as if it hurts your chances of getting a job. It is a hassle,” she said.

A hassle, in part, because employers have no incentive to help laid off workers get unemployment, Edwards added. In fact, companies pay higher taxes the more their former employees claim unemployment benefits.

“It’s not as if their employer is like, ‘Oh, by the way, please go out and incur me a tax penalty by applying for this benefit,'” said Edwards.

That leaves employees on their own to navigate what Luke Shaefer, the Michigan professor, calls “the most arcane and complicated” government program.