As agreement strengthens in Silicon Valley and Wall Street regarding the impending artificial intelligence “job apocalypse,” there are few clear answers on what will follow.
Anthropic CEO Dario Amodei and Microsoft AI leader Mustafa Suleyman have forecast that most white-collar roles could be automated over the next one to five years, while JPMorgan Chase CEO Jamie Dimon stated last month that the time has come to begin considering large-scale AI-driven labor upheaval. A recent analysis from Morgan Stanley presented a more measured perspective for workers: Your current position may be phased out, but you won’t remain unemployed indefinitely as new jobs emerge to replace old ones.
Regardless of which long-term predictions prove accurate, AI-related layoffs are already occurring, bringing with them growing economic uncertainty for newly jobless workers in a sluggish job market.
Many might turn to unemployment insurance benefits—designed to support workers as they seek new employment—and Amodei has repeatedly urged the government to prepare for high unemployment rates.
However, in 2022, nearly 75% of unemployed individuals did not even apply for such benefits, according to the Bureau of Labor Statistics (BLS). Experts who spoke to note this figure remains relevant today.
Over the past year, weekly new unemployment insurance claims have stayed within a relatively steady range of 200,000 to 250,000, even as the unemployment rate rose from 4.2% a year ago to 4.4% last month. This suggests many workers are not utilizing a critical safety-net resource.
Why people don’t apply
A 2023 BLS survey of 2022 unemployment applications revealed that 55% of non-applicants believed they were ineligible for benefits.
Potential eligibility barriers included their employment not being covered by unemployment insurance, leaving their job voluntarily, termination for misconduct, insufficient prior work history, and having previously exhausted benefits.
Meanwhile, 17% refrained from applying because they anticipated securing new employment quickly, and 10% cited reasons such as not needing the funds, holding a negative view of unemployment benefits, being unaware of them, or encountering application difficulties.
Applicants also face a high rejection rate. The BLS reports that only around 55% of those who apply for benefits actually receive them.
Grasping the unemployment insurance system can be challenging because it is not a single national program. Each state and territory has its own rules and criteria.
Factors such as the reason for leaving a job, earnings in recent quarters, and willingness to accept new work influence eligibility. Consequently, recent graduates and those returning to work after parental or family leave are less likely to qualify due to not meeting earnings thresholds.
There remain common misunderstandings about eligibility, said Alexander Hertel-Fernandez, a government professor at Columbia University who served in the Department of Labor and the White House during the Biden administration. Many assume quitting a job automatically disqualifies one, but this depends on the reason for leaving. Harassment or workplace law violations are valid grounds for resignation and may not affect eligibility, though rules vary by state.
It is difficult to identify non-applicants because they do not appear in official data, Hertel-Fernandez told . Through research coauthored with the National Employment Law Center, he found that workers with higher levels of formal education and income are far more likely to apply for unemployment insurance. He noted that white workers are more prone to apply for and receive benefits compared to workers of color, who are less likely to believe they qualify.
Even after applying, the process of receiving benefits can be lengthy.
“Applying for unemployment often involves navigating a legal process. Employers may attempt to contest your application,” Hertel-Fernandez stated, adding that a quarter of applicants report employers challenging their claims. “Employers have an incentive to do this because, in most states, their taxes increase when employees claim unemployment benefits. There is a direct connection between the two.”
He attributed the low application rate in part to the decline of labor unions. BLS data shows union membership dropped to a historic low of 9.9% in 2024 and saw minimal growth in 2025.
“One of the strongest indicators of whether you will apply for and receive benefits is union membership, as unions help demystify the process and may even assist with applications,” he said. BLS data indicates that workers who were union members in their previous jobs are twice as likely to apply for benefits.
Preparing the system for more layoffs
The unemployment insurance framework has not been updated since its creation as part of the New Deal, and federal taxes funding the program have remained unchanged since the 1980s.
“We put [the system] to the test repeatedly—during every recession or economic downturn, such as the COVID-related crisis,” said Rachael Kohl, an assistant professor at Wayne State University Law School. She previously directed the Workers’ Rights Clinic at the University of Michigan Law School, where she primarily handled unemployment insurance cases.
During the pandemic, UI benefits supported one in six U.S. adults and kept at least 4.7 million people out of poverty, per the BLS and U.S. Census Bureau. Yet, many state systems continue to grapple with payout delays that emerged during this period.
Over time, benefit durations have also diminished. Historically, unemployed workers qualified for 26 weeks of insurance, but states like Arkansas, Florida, and North Carolina have reduced this to just 12 weeks. Hertel-Fernandez noted that while the original aim of unemployment insurance was to replace 50% of prior wages, in many states it now replaces closer to 30% or less.
“A comprehensive overhaul is truly necessary, especially as we consider AI’s impact on potential labor market disruptions and the possibility of another recession on the horizon,” he said, emphasizing that the current system is ill-prepared for widespread, long-term unemployment. He proposed simplifying the application process and expanding eligibility for those with limited labor market experience.
“While that timeframe may be sufficient to find new work in normal circumstances, if we anticipate certain jobs disappearing, it will be far more challenging to use that period for retraining and supporting transitions to entirely different industries or occupations.”