The Post's editorial ''Fixing Unemployment Insurance,'' {Jan. 8} is right on target. Unemployment insurance badly needs repair.

But the editorial failed to mention a disgraceful and important aspect of the system: the low level of benefits.

Many working people believe that they can count on the system to replace most of their pay. But when they lose their jobs, they are in for a rude shock. If they are lucky enough to beat the odds and get some benefits, their payments average only a third of the lost wages, thanks to the caps on weekly benefits. Most developed countries would consider this scandalous. Here, it's become business as usual.

A few issues quickly wither away. The unemployment insurance problem isn't one of them. The unemployment rate has gone up with the onset of recession, and one thing we have learned about recessions is that unemployment rises rapidly and recedes slowly. So even after the current recession is gone, a high unemployment rate (and the need for unemployment insurance reform) will probably linger on.

It's time for the federal government to repair this part of the safety net -- to make unemployment insurance available to more people who need it, to raise benefits to a minimally respectable level and to extend benefits beyond the 26-week deadline for those who are suffering most from the recession.

Actually, these repairs are long overdue. It was 11 years ago that the National Commission on Unemployment Compensation suggested reform along those lines. We in the AFL-CIO have been making the case for extending eligibility and raising benefit levels for some time.

THOMAS DONAHUE Secretary-Treasurer, AFL-CIO Washington