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New drug testing rule will strengthen connection between unemployment benefits and successful returns to work | American Enterprise Institute

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First created in the 1930s, the nation’s Unemployment Insurance (UI) system today provides weekly benefit checks to around 1.7 million Americans who have been laid off through no fault of their own. UI receipt rises sharply during recessions, when weeks of available benefits also are typically lengthened. In the wake of the most recent recession, for example, a record 99 total weeks of UI checks were payable in many states. But to be eligible for those checks, UI recipients must be “able and available for work” and actively searching for a new job.[i] A new rule published last week by the Department of Labor would strengthen the connection between UI benefits and successful returns to work by allowing states to condition eligibility for UI on passing a drug test when the job the person is seeking expects the same.

the oddity of not following such a policy, which defines how all but a handful
of states currently intend to pay UI benefits.[ii]

Let’s say an unemployed worker collecting UI benefits is seeking a new job in the trucking industry. Despite fears of a supposedly impending robot apocalypse, the trucking industry continues to experience a shortage of drivers. It’s also relatively well-paying compared to other occupations that do not require a college degree. For example, earlier this year, Walmart announced it was raising driver salaries to $87,500 per year on average. So seeking a trucking job can be a promising option for some UI recipients.

But to get a job as a truck driver, you have to first pass a drug test. As the Federal Motor Carrier Safety Administration puts it, “Generally, all CDL (commercial driver’s license) drivers who operate commercial motor vehicles subject to the CDL requirements on public roads in the US are performing safety-sensitive functions and are subject to DOT drug and alcohol testing (§382.103). This includes all full-time, part-time, intermittent, backup and international drivers.” Given that, does it make any sense for states to pay UI checks to someone seeking that sort of work who can’t pass a drug test? Is that person really “able and available” for that desired work if they can’t pass the drug test needed to actually be hired? The new DOL rule, building off legislation Congress enacted in 2012 and reinforced in 2017, allows states to say “no” and condition eligibility for UI benefits on passing a drug test in such cases.

Job seekers wait in front of the training offices of Local Union 46, the union representing metallic lathers and reinforcing ironworkers, in the Queens borough of New York. REUTERS/Keith Bedford

While the new rule makes
this optional for states, since state taxes support most UI benefits in a
typical year, more states may be inclined to adopt this policy. If they do, the
implications could be significant, as surveys suggest large shares of US jobs
require substance abuse screening, with especially high rates in sectors such
as transportation and manufacturing.[iii]

In effect, to not pursue this policy accepts paying UI checks to people who are not really able to go to work in especially those industries, violating a longstanding program norm. And since UI checks replace less than half of income from work, longer stays on UI mean lower family incomes and more poverty. Some suggest the cost of testing is prohibitive, but private industry costs average between just $30 and $60 per test, which is a fraction of the $370 average weekly UI check across the country. Still, states have limited UI administrative funds available to cover such costs, so that will ensure states weigh the costs and benefits closely.   

The US House recently voted on an overwhelming bipartisan basis to expand efforts to help UI recipients return to work more quickly. As that legislation was being crafted, Danny Davis (D-IL), the Chairman of the Ways and Means subcommittee responsible for the UI program, stated that “especially for lower paid workers, who may not have any savings to fall back on, the best outcome is to find a new job as quickly as possible.” Chairman Davis is right. This new rule offers states a new tool to reinforce that goal, which should reduce UI durations and speed returns to work by sending a clear message that UI benefits are reserved for those who are “able and available” for work. This tool makes particular sense when unemployment is at 50-year lows and many employers report failed drug tests as a major obstacle to filling open positions.

[i] Exceptions are made for those expected to be called back to their former job or those who belong to a union that does not permit self-driven work search. “State UI job search rules and reemployment services,” Monthly Labor Review, June 2006.

[ii] According to the Congressional Research Service, three states (Mississippi, Texas, and Wisconsin) have enacted drug testing legislation under existing federal regulation.

[iii] The exact prevalence of pre-employment drug testing is subject to debate, with some sources noting as many as 78 percent of surveyed employers recently reporting using substance abuse screening, while others indicate that such pre-employment screens cover “some 40 percent of all jobs.” For a variety of reasons, the prevalence is believed to have declined since the 1990s.

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