Summary: More than 97 percent of all wage and salary workers are covered under the Unemployment Insurance program. But the percentage of unemployed workers who applied for and were deemed eligible to receive unemployment benefits has fallen by 20 percent since the late 1970s to about 40 percent. GAO found that the deteriorating financial condition of state trust funds had ultimately affected the proportion of the unemployed who received unemployment benefits. Declining trust fund balances were linked to changes in the law that tightened program eligibility and lowered wage replacement rates. GAO concludes that the program's objectives are no longer being met to the extent they were during the program's first four decades. If the same percentage of unemployed workers had received comparable unemployment insurance benefits during the 1990-91 recession as during the 1974-75 recession, about $20 billion more in payments would have been available to stabilize the economy and bolster the incomes of the unemployed. The shrinking number of recipients during the 1980s probably contributed to more than a quarter million people slipping below the poverty line by 1990.
