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As consensus grows in Silicon Valley and Wall Street about the incoming artificial intelligence \u201cjob apocalypse,\u201d there are few answers on what comes next.\u00a0<\/p>\n
Anthropic CEO Dario Amodei and Microsoft AI chief Mustafa Suleyman have predicted that most white-collar jobs could be automated within the next one to five years, and JPMorgan Chase CEO Jamie Dimon said last month that now is the time to start thinking about large-scale AI labor disruption. A recent analysis from Morgan Stanley offered a more tempered outlook for workers: your current job may be replaced, but you won\u2019t be unemployed forever as new jobs replace old ones.\u00a0<\/p>\n
Regardless of which predictions are correct in the long term, AI layoffs are here, and they bring with them looming economic uncertainty for newly unemployed workers in a stagnating job market.\u00a0<\/p>\n
Many could turn to unemployment insurance benefits designed to tide workers over while they find new work, and Amodei has repeatedly called on the government to prepare for high unemployment.\u00a0<\/p>\n
But in 2022, nearly 75% of unemployed people didn\u2019t even apply, according to the Bureau of Labor Statistics (BLS). Experts who spoke to Fortune say that number is still accurate today.\u00a0<\/p>\n
Over the past year, new unemployment insurance claims have held at a relatively stable range of 200,000 and 250,000 claims per week, even as the unemployment rate has risen to 4.4% last month from 4.2% a year earlier, signaling that many workers are not taking advantage of a key safety-net measure.\u00a0<\/p>\n
Why people don\u2019t apply<\/p>\n
According to a 2023 BLS survey of 2022 unemployment filings, 55% of people didn\u2019t apply because they didn\u2019t believe they were eligible for benefits.\u00a0<\/p>\n
Potential eligibility issues included their work not being covered by unemployment insurance, voluntary departures from their job, termination for misconduct, insufficient past work, and previously exhausting benefits.<\/p>\n
Meanwhile, another 17% didn\u2019t apply because they expected to get a new job soon, and 10% said they didn\u2019t need the money, had a negative attitude about unemployment benefits, didn\u2019t know about them, or had problems applying.<\/p>\n
Applicants also face a high rejection rate. Only about 55% of people who apply for benefits receive them, according to the BLS.\u00a0<\/p>\n
Understanding the unemployment insurance system can be daunting because it\u2019s not one national system. Each state and territory has its own rules and qualifications.\u00a0<\/p>\n
Factors such as why you left your job, how much you earned in recent quarters, and your willingness to accept new work affect eligibility. As such, recent graduates and people returning to work after parental or family leave are less likely to be eligible because they don\u2019t meet the earnings qualifications.\u00a0<\/p>\n
There are still some common misconceptions about eligibility, said Alexander Hertel-Fernandez, a professor of government at Columbia University, who served in the Department of Labor and the White House during the Biden administration. Many people think quitting automatically makes one ineligible, but it depends on why a worker left. Harassment or workplace law violations are legitimate reasons to quit and may not affect eligibility, and the rules are different in each state.\u00a0<\/p>\n
It\u2019s hard to know who doesn\u2019t apply for unemployment insurance because they don\u2019t show up in the data, Hertel-Fernandez told Fortune. From his co-authored research with the National Employment Law Center, he found that workers with more formal education and higher earnings are much more likely to apply for unemployment insurance. White workers are more likely to apply and receive benefits than workers of color, who are less likely to think they are eligible, he said.\u00a0<\/p>\n
Even after you apply, the process to get benefits can be prolonged.\u00a0<\/p>\n
\u201cOften, applying for unemployment means going through a legal process. Your employer may try and fight your application process,\u201d Hertel-Fernandez said, adding that a quarter of applicants say their employers tried to contest their application. \u201cEmployers have a reason to do this because their taxes go up in most states if you claim unemployment benefits. There\u2019s a direct link between the two.\u201d<\/p>\n
He pointed to the decline of labor unions as one reason why so many people don\u2019t apply for benefits in the first place. Labor union membership fell to a historic low of 9.9% in 2024 and made little gains in 2025, according to the BLS.\u00a0<\/p>\n
\u201cOne of the best predictors of whether or not you apply for benefits and you receive them is if you belong to a union, because the union helps you understand the process and can even help you with the application,\u201d he said. People who belonged to unions in their previous jobs are twice as likely to apply for benefits, according to the BLS.\u00a0<\/p>\n
Preparing the system for more layoffs<\/p>\n
The framework for unemployment insurance has not been updated since it was created as part of the New Deal, and the federal taxes that support the program have not changed since the 1980s.\u00a0<\/p>\n
\u201cWe test [the system] every time, every time there\u2019s a recession or some type of economic downturn, like when it was related to COVID,\u201d Rachael Kohl, an assistant professor at the Wayne State University Law School, told Fortune. She previously directed the Workers\u2019 Rights Clinic at the University of Michigan Law School, where she primarily handled unemployment insurance cases.\u00a0<\/p>\n
During the pandemic, UI benefits provided support to 1 in 6 U.S. adults and kept at least 4.7 million people out of poverty, according to the BLS and the U.S. Census Bureau. Still, many states\u2019 systems were beleaguered with payout delays that continue today.\u00a0<\/p>\n
Over time, benefits have shrunk as well. Historically, jobless workers were eligible for 26 weeks of insurance, but some states, like Arkansas, Florida, and North Carolina, have cut that down to just 12 weeks. The original goal of unemployment insurance was to replace 50% of previous wages, but in many states it\u2019s closer to 30% or less, Hertel-Fernandez said.\u00a0<\/p>\n
\u201cReally, a wholesale reform is needed, especially as we think about the impact of AI on potential labor market disruptions, and especially as we might think of another recession coming down the pike as well,\u201d he said, adding that the current system is not prepared for widespread, long-term unemployment. He suggested making the application process easier and increasing eligibility for people who have limited experience in the labor market.\u00a0<\/p>\n
\u201cWhile that may be appropriate for you to find another job in normal times, if we\u2019re predicting that some jobs may be disappearing, it\u2019s going to be a lot harder to use that time to retrain and support, say, shifting to a whole other industry or occupation.\u201d<\/p>\n
#job #disruption #compounded #dont #apply #unemployment #benefits<\/p>\n","protected":false},"excerpt":{"rendered":"
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