News & Updates

Striking a Balance: The Role of Unemployment Insurance in Supporting Minnesota Workers

by | Mar 11, 2024 | News

Minnesota’s economic landscape is marked by a growing disparity between corporate profits and workers’ wages. Between 2009 and 2021, corporate profits grew three times more than average earnings. When workers take action to shrink this gap, billionaire-backed corporations can rely on this disparity to prevent them from succeeding. If workers strike, wealthy corporations utilize their increasingly large profits to wait out workers living on meager savings from stagnant wages. Faced with this dynamic, Minnesota workers must choose between advocating for the pay and working conditions they deserve and being able to provide for their families.

It is time to bring more fairness to the negotiating table and enable Minnesota workers to use their collective voice without fear of economic disaster. To create a more level playing field between workers and wealthy corporations, Minnesota should allow striking workers to access Unemployment Insurance (UI). Doing so will provide workers with peace of mind, knowing that if they need to utilize a strike as a last resort, they will have access to a small but essential level of assistance that can protect their families from hardship. 

This report demonstrates the relative costs and benefits of Minnesota providing UI to striking workers. 

Key findings:

  • Miniscule cost: Expanding UI to cover striking workers will have a very small impact on the state’s unemployment program. Drawing on recent data, our analysis estimates that UI benefits for striking workers would comprise approximately 0.2% of all claims paid out to jobless workers in the state. 
  • No work disincentive: Providing UI to striking workers would not push people away from showing up to their jobs. UI replaces only a portion of people’s income and does not provide other benefits derived from work, including health insurance, meaning it does not disincentivize work.
  • Historical precedent and eligibility: Looking at the history of UI in America suggests that striking workers should always have been considered eligible for unemployment benefits. New York, which has a UI program older than the federal policy, has always provided UI to striking workers.
  • Critical financial support for workers and communities: While UI provides only a partial replacement for striking workers’ income, the benefit is substantial. It allows workers to avoid economic catastrophe, keeping them in a position where they can continue to fight for wage gains rather than taking a weaker job. Moreover, striking workers will spend their UI benefits in their communities, ensuring that their push for better pay and working conditions does not lead to a broader downturn in their local economy.

Minnesota has an opportunity to lead in restoring balance to labor relations. By extending UI benefits to striking workers, this report shows that the state can make it possible for people to negotiate with wealthy corporations without fear of hurting their families. To the extent that this expansion of UI scares billionaire-backed corporations who worry that workers will be more likely to strike, there is an easy and efficient solution: stop lining the pockets of CEOs with the fruits of workers’ labor and provide the kind of wages and working conditions that prevent strikes in the first place. 

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