Kansas.gov

Unemployment Insurance - A History

The first unemployment insurance plans, supported by dues, were adopted by some larger trade unions in Switzerland in 1789. Even earlier, a version of unemployment insurance in trade guilds was supported by levies on guild members. The first government system of unemployment compensation appeared in Great Britain in 1911. Nearly every major country has enacted an unemployment insurance system.

Wisconsin enacted a state unemployment insurance plan in 1932 in response to the Great Depression, when more than 25 percent of the adult workforce was unemployed.

The Unemployment Insurance (UI) Program in the United States is 80 years old. On August 14, 1935, President Franklin D. Roosevelt signed the Social Security bill which contained provisions for UI. This legislation was the key step in establishing a UI system in the United States. In all states, the system is a federal-state joint venture, financed by both federal and state unemployment taxes.

The enactment of House Bill 542 in the 1937 Kansas Legislature, signed by Governor Walter Huxman on March 26, created the Division of Unemployment Compensation.

Today, the UI program is administered by the Kansas Department of Labor, Division of Employment Security, to provide temporary, weekly compensation to qualified unemployed workers. The two units of this division are Benefits and Tax (Contributions). The Benefits unit determines claimant eligibility and payment of unemployment benefits. The Tax unit collects the state unemployment tax from subject employers.

Business, labor and government give credit to the Unemployment Insurance Program as a factor in reducing the severity of recessions and other fluctuations in the economy that create involuntary unemployment. The Unemployment Insurance Program has a beneficial impact on the individual worker, as well as the community where the peaks and valleys of economic activity are much sharper than those occurring statewide.

Unemployment insurance cannot solve the problem of joblessness. Only more jobs can reduce unemployment. A healthy economy is the key to more jobs; KDOL's programs can help develop and maintain that economy.