Back when times were good, Georgia businesses lobbied state government to slash the amount of money that they were required by law to set aside to pay future unemployment benefits. You know, just to have in case things turned sour.
It should not surprise you to learn that the request was granted.
Contributions to the state’s unemployment insurance trust fund were cut well below recommended levels, so that by the time the recession hit, the amount of money in the fund wasn’t close to sufficient. What we should have set aside in times of abundance wasn’t there when times turned hard.
As a result, the state has been forced to borrow more than $700 million from the federal government to pay unemployment benefits and now has to pay that money back, with interest. So where’s that money going to come from?
Probably not from business. Mark Butler, head of the Georgia Department of Labor, has commissioned a task force to study the problem. The report is in, but Butler has said he won’t release it until the state’s business community has had a chance to see it and comment on it. That’s a pretty good indication of the pecking order in this state.
Butler has also made it pretty clear that he won’t ask companies to contribute to solving a problem that they helped to create. Even if he did, it’s unlikely the Legislature would approve it. Instead, he will probably propose to fund the repayment by cutting benefits paid to unemployed workers in Georgia and perhaps reducing the number of weeks the benefit will be paid.
At $258, the weekly average unemployment check already isn’t a lot, but at least it’s something. That amount of money puts a family of four well below the federal poverty level, but psychologically and economically, it at least helps to keep the wolves at bay. Having that money cut by any substantial amount would make a hard situation even more difficult for many of our fellow Georgians.
State officials are also studying the option of saving money by slashing the amount of time — now set at 26 weeks — that unemployed Georgians are eligible to collect state-funded benefits.
Nationally, this recession has been particularly destructive to lives, hopes, careers and marriages because of the length of unemployment it inflicts. At this point, more than 44 percent of jobless Americans have been unemployed for more than 26 weeks; here in Georgia, the number is 52.7 percent, which translates into more than a quarter million Georgians who have been unemployed for five months or longer.
With that many people unemployed for so long, you could certainly save a good chunk of cash by slashing eligibility to less than 26 weeks. And in the minds of some, that would be a good thing. In Congress and here in Georgia, you hear repeated claims that unemployment benefits — even at meager levels of $258 a week — encourage people to remain jobless and not return to the workforce.
In individual cases, that of course can be true, but I don’t think it’s right to punish the many for the sins of a few. In addition, repeated studies suggest that in an economy like this one, the problem is pretty rare. In a strong economy with a lot of jobs available, unemployment insurance can delay a return to the workforce. But in this kind of economy, with many more applicants than job openings, it doesn’t happen much.
In the end, I can certainly understand why state policymakers are reluctant to raise taxes on business in an economy as tough as this one. That makes a lot of sense. But with a state unemployment rate still in double digits, shouldn’t state leaders be equally reluctant to slash benefits for Georgians trying to keep their families fed, clothed and housed?
Are compassion and balance no longer virtues?