[Update, November 23, 2013: Business interests in Massachusetts, greatly troubled by the passage by the State Senate of a bill increasing the minimum wage, are pleading with the House of Representatives not to go along unless changes to the state’s unemployment insurance law are enacted at the same time. The Globe’s Scot Lehigh joined their cause yesterday, urging organized labor to accept such a compromise.
One of the proposed changes would make it more difficult for people who are new to the workforce or who have intermittent work histories to qualify for unemployment insurance, on the theory that the jobs these workers lost were, in Lehigh’s words “clearly meant as seasonal positions” and employers should not be penalized by having to pay unemployment insurance benefits for jobs intended to be temporary. This argument suffers from several false assumptions, including the fact that “seasonal positions” are already exempt from coverage under our unemployment insurance law. More reasons why this is a bad idea in the post below.]
As abundantly demonstrated by their fixation on EBT cards, members of the Republican Party in our state can most always be counted on to speak out against the welfare system. (In their partial defense, it is one topic that their friends in the media are always eager to cover.)
So it would seem to be the rare instance when they endorse policies that would likely increase the number of families receiving welfare. But it happened yesterday. After Governor Patrick filed legislation to block for the coming year a scheduled increase in the amount that employers pay into the fund from which unemployment insurance (UI) benefits are drawn, Senator Bruce Tarr (R-Gloucester) jumped on that piece of good news and pushed Patrick for more:
“We’re glad to hear the Governor is joining us in seeking to combat unacceptable unemployment insurance rates and hope he will also join us as we seek to implement long-term reforms in the state’s unemployment insurance system….The coming legislative session will offer us the opportunity [for] comprehensive solutions that promote economic growth.”
We already know what those “comprehensive solutions”” are. The GOP has been pushing for them for a decade or more. Mitt Romney supported them when he was Governor (which is to say, before he decided that the unemployment insurance program should be scrapped in its entirety).
One of the proposed solutions would make more people completely ineligible for UI: those who are new to the labor force or who have intermittent work histories. These are employment profiles that fit lots of workers during this recessionary time.
The solution would work like this: single mom with one child gets a full time job at minimum wage, earning $320 per week. She works for four months, then her employer decides she’s no longer needed.
Under the law today, she would receive about $800 a month in UI for a brief period (under three months, consistent with her abbreviated work history). This income support, which would come from employers rather than taxpayers, would go far to help keep the family afloat until she finds another job.
Under the GOP’s proposed solution, she would receive nothing in UI, because she had not worked a sufficiently long time. Her other options until she finds another job? Probably only to apply for taxpayer-funded welfare, which would provide her with $518 per month, one-third less than she would have received in UI (the welfare grant amount has not been raised in 13 years). Assuming she was even eligible to receive this assistance, she and her child would still face a substantially greater risk of becoming homeless, with all those attendant burdens on society. But because she was ineligible for UI benefits, her employer would not face any resulting increase in UI expenses.
File this solution under: privatizing profits and socializing costs.