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August 14th Marks 75 Years of Unemployment Insurance
Media CONTACT:  Tom Fuller
Communications Manager
Oregon Employment Department

On August 14, 1935 President Franklin Delano Roosevelt signed into law the Social Security Act.  This landmark legislation, spurred by the Great Depression, contained provisions for unemployment insurance.

“Over these past 75 years, the unemployment insurance program has played a vital role in protecting Oregon’s workers and their families,” said Governor Ted Kulongoski.  “The funds provided through the program not only sustained workers who had lost their jobs through no fault of their own, but it has held up entire communities during times of economic downturn.”

Purpose of unemployment insurance
The Unemployment Insurance system was created to stabilize the economy and alleviate personal hardship stemming from involuntary job loss. It is a federal-state partnership, based on Federal law, but administered by state employees under state law.

The Unemployment Insurance program provides temporary cash benefits to individuals who are unemployed through no fault of their own.  In Oregon, employers pay into a trust fund that is used to provide unemployment benefits. These benefits help to maintain an individual’s purchasing power; they are spent immediately on necessities such as food, fuel and housing, and thus provide some stability for struggling local economies.

Every dollar paid in unemployment benefits generates approximately $1.60 in economic activity.

History of Unemployment Insurance
In 1931, in the midst of the Great Depression, an Oregon state emergency employment commission reported to Governor Julius Meier: “Our primary object should be that no man willing and able to work for the support of himself and his family should ever become an object of charity in Oregon.” In 1932, Wisconsin became the first state in the union to put into place an unemployment insurance program. 

On the basis of the Commission report, the Oregon Legislature established an Unemployment Insurance Commission in 1933 to study the problem and report back to the 1935 Legislature on the desirability of adopting unemployment insurance in Oregon.

The Oregon Unemployment Compensation Law was passed in a special session of the Legislature on November 15, 1935 and the State Unemployment Compensation Commission was formed.
Contributions to Oregon’s unemployment insurance trust fund began in January, 1936, and the first unemployment benefit check was paid out on January 15, 1938 to James H. Allen in Ontario for the sum of $15.

In the first full year of the program, Oregon handled 96,741 claims and paid out more than $5.9 million in unemployment benefits.

In 2009, Oregon made more than eight million payments totaling in excess of $2.8 billion.