Chapter 7: Worker Protections

History of Insurance

Unemployment Insurance

Unemployment insurance has been around since the Great Depression. It was enacted in 1935 to help stabilize the economy when millions of people were out of work.

Unemployment insurance was part of the Social Security Act, which was included in President Franklin Roosevelt's New Deal. The New Deal consisted of several programs aimed at improving the economy, which was suffering through the Great Depression in the 1930s. These programs focused on relief, recovery, and reform (sometimes called the three Rs) and were enacted between 1933 and 1936. The Social Security Act went into effect in 1935. Unemployment insurance provided relief to the millions of workers who had lost their jobs.

Fast-forward to the early twenty-first century, when millions of people were out of work due to a global economic crisis. Unemployment during this Great Recession reached its peak in 2009, when there were six job seekers for every job opening. This compares to 1.5 job seekers for every opening before the recession. Unemployment insurance provided some financial relief to those who could not find jobs. In 2008, Congress enacted an extension of unemployment benefits to allow up to 99 weeks of benefits.