As consensus grows in Silicon Valley and Wall Avenue in regards to the incoming synthetic intelligence “job apocalypse,” there are few solutions on what comes subsequent.
Anthropic CEO Dario Amodei and Microsoft AI chief Mustafa Suleyman have predicted that the majority white-collar jobs might be automated inside the subsequent one to 5 years, and JPMorgan Chase CEO Jamie Dimon mentioned final month that now could be the time to begin occupied with large-scale AI labor disruption. A current evaluation from Morgan Stanley supplied a extra tempered outlook for employees: your present job could also be changed, however you gained’t be unemployed perpetually as new jobs change previous ones.
No matter which predictions are appropriate in the long run, AI layoffs are right here, and so they carry with them looming financial uncertainty for newly unemployed employees in a stagnating job market.
Many may flip to unemployment insurance coverage advantages designed to tide employees over whereas they discover new work, and Amodei has repeatedly known as on the federal government to organize for prime unemployment.
However in 2022, almost 75% of unemployed folks didn’t even apply, in keeping with the Bureau of Labor Statistics (BLS). Specialists who spoke to Fortune say that quantity remains to be correct in the present day.
Over the previous yr, new unemployment insurance coverage claims have held at a comparatively steady vary of 200,000 and 250,000 claims per week, even because the unemployment fee has risen to 4.4% final month from 4.2% a yr earlier, signaling that many employees will not be profiting from a key safety-net measure.
Why folks don’t apply
Based on a 2023 BLS survey of 2022 unemployment filings, 55% of individuals didn’t apply as a result of they didn’t consider they had been eligible for advantages.
Potential eligibility points included their work not being coated by unemployment insurance coverage, voluntary departures from their job, termination for misconduct, inadequate previous work, and beforehand exhausting advantages.
In the meantime, one other 17% didn’t apply as a result of they anticipated to get a brand new job quickly, and 10% mentioned they didn’t want the cash, had a unfavorable angle about unemployment advantages, didn’t learn about them, or had issues making use of.
Candidates additionally face a excessive rejection fee. Solely about 55% of people that apply for advantages obtain them, in keeping with the BLS.
Understanding the unemployment insurance coverage system will be daunting as a result of it’s not one nationwide system. Every state and territory has its personal guidelines and {qualifications}.
Components corresponding to why you left your job, how a lot you earned in current quarters, and your willingness to just accept new work have an effect on eligibility. As such, current graduates and folks returning to work after parental or household go away are much less prone to be eligible as a result of they don’t meet the earnings {qualifications}.
There are nonetheless some widespread misconceptions about eligibility, mentioned Alexander Hertel-Fernandez, a professor of presidency at Columbia College, who served within the Division of Labor and the White Home through the Biden administration. Many individuals suppose quitting robotically makes one ineligible, but it surely relies on why a employee left. Harassment or office legislation violations are legit causes to stop and should not have an effect on eligibility, and the foundations are totally different in every state.
It’s arduous to know who doesn’t apply for unemployment insurance coverage as a result of they don’t present up within the information, Hertel-Fernandez instructed Fortune. From his co-authored analysis with the Nationwide Employment Legislation Heart, he discovered that employees with extra formal schooling and better earnings are more likely to use for unemployment insurance coverage. White employees usually tend to apply and obtain advantages than employees of colour, who’re much less prone to suppose they’re eligible, he mentioned.
Even after you apply, the method to get advantages will be extended.
“Often, applying for unemployment means going through a legal process. Your employer may try and fight your application process,” Hertel-Fernandez mentioned, including {that a} quarter of candidates say their employers tried to contest their software. “Employers have a reason to do this because their taxes go up in most states if you claim unemployment benefits. There’s a direct link between the two.”
He pointed to the decline of labor unions as one cause why so many individuals don’t apply for advantages within the first place. Labor union membership fell to a historic low of 9.9% in 2024 and made little positive factors in 2025, in keeping with the BLS.
“One 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,” he mentioned. Individuals who belonged to unions of their earlier jobs are twice as prone to apply for advantages, in keeping with the BLS.
Making ready the system for extra layoffs
The framework for unemployment insurance coverage has not been up to date because it was created as a part of the New Deal, and the federal taxes that assist this system haven’t modified for the reason that Eighties.
“We test [the system] every time, every time there’s a recession or some type of economic downturn, like when it was related to COVID,” Rachael Kohl, an assistant professor on the Wayne State College Legislation Faculty, instructed Fortune. She beforehand directed the Employees’ Rights Clinic on the College of Michigan Legislation Faculty, the place she primarily dealt with unemployment insurance coverage instances.
Throughout the pandemic, UI advantages offered assist to 1 in 6 U.S. adults and saved at the very least 4.7 million folks out of poverty, in keeping with the BLS and the U.S. Census Bureau. Nonetheless, many states’ methods had been beleaguered with payout delays that proceed in the present day.
Over time, advantages have shrunk as nicely. Traditionally, jobless employees had been eligible for 26 weeks of insurance coverage, however some states, like Arkansas, Florida, and North Carolina, have lower that down to simply 12 weeks. The unique purpose of unemployment insurance coverage was to switch 50% of earlier wages, however in lots of states it’s nearer to 30% or much less, Hertel-Fernandez mentioned.
“Really, 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,” he mentioned, including that the present system just isn’t ready for widespread, long-term unemployment. He recommended making the appliance course of simpler and rising eligibility for individuals who have restricted expertise within the labor market.
“While that may be appropriate for you to find another job in normal times, if we’re predicting that some jobs may be disappearing, it’s going to be a lot harder to use that time to retrain and support, say, shifting to a whole other industry or occupation.”
