WASHINGTON - some States which have drained their unemployment funds reduce the number of weeks that a dismissed worker can count on these benefits. Legislators are trying to limit tax for companies increases reconstitute the pool and hope that the Federal Government retains intervening in the economy sliding.
Michigan, Missouri and Arkansas has recently reduced the maximum number of weeks that the unemployed can obtain unemployment benefits. Florida is about to do so. Unemployment in these States varies from 7.8% in Arkansas to 11.1% in Florida.
Reductions in benefits come as legislatures deal with the damage that the recession imposed relating to unemployment insurance programs. The strong increase in the number of people who have lost their employment drained the pool of money dedicated to pay benefits.
About 30 States borrowed more than $ 44 billion of the Federal Government to continue payments to laid-off workers. Many States precipitated the insolvency of their funds by keeping balances at the historically low level, enter the slowdown.
The burden of reconstruction funds and loans of dividends will fall mainly on businesses through higher taxes, but the benefit reductions are an effort to limit tax increases.
Typically, States provide up to 26 weeks of benefits for laid-off workers. Michigan and Missouri were reduced to a maximum of 20 weeks. Arkansas went to 25.
Florida is considering a change more complex linking the duration of benefits to the strength of the economy. The CAP would range from 23 weeks during periods of unemployment in double digits for as little as 12 weeks during periods of extremely low unemployment. The Florida legislature approved the changes, but the Governor has not signed the law.
Once the State benefits are exhausted, laid-off workers are often eligible for 13 weeks to 20 weeks of additional benefits. States and the Federal Government usually split the cost of this program. Period of recession, Congress usually takes assistance a little further, offering several months more benefits of emergency entirely paid by the Federal Government.
The measures taken by the legislative assemblies specifically apply to State benefits, but also will reduce future federal benefits because the changes affect the formula used to calculate the.
Allen McClendon, 40, of Kansas City, MO., said that he lost his job as a mechanic in August 2010 and obtain unemployment benefits in Missouri since February. He said that the payments allow him to buy food, make payments on his truck, and pay for the gas and auto insurance. It is concerned about what will happen if the benefits of its State and federal exhaustion before he lands a job.
Until this happens, it hopes to obtain the formation of a centre of employment in Missouri that would allow him to obtain a commercial driver's license or repair of heating and cooling.
He said "if they before exhaustion have completed my schooling and have got a job, so I am really in difficulty". "I was working rather than address to this," he said.
Benefits vary from one State to another, but about $300 average a week, or about a third of the previous wage of the beneficiary.
In the economic situation is good, most of the unemployed is a new job before the ending of their benefits. But in times of high unemployment, States came to rely on additional support from the Federal Government. Some say that reliance plays a role in the Bills to the benefits of the CAP.
"Many States is essentially saying, 'Hey, why we pay for these benefits when, during a recession, the Federal Government should intervene?'" ", said Steve Woodbury, Professor of Economics at Michigan State University.
Senator Debbie Stabenow, D-Mich., said based on the Federal Government to follow the cash flows is risky. She said the fight last year was difficult, with the Democrats barely able to generate the votes required to adopt a Bill to extend benefits unemployment.
"I believe that it would be an error of judgment to assume that the Republican House would extend unemployment benefits," she said.
Senator Orrin Hatch, R-Utah, said Congress in the future could concern repeated extensions of unemployment benefits would serve as a deterrent to find a job.
"There is a kernel of truth that" concern, said Hatch, Senior Republican on the Finance Committee of the Senate, which has jurisdiction over the program.
Employers pay State and federal taxes for unemployment insurance. States collect the taxes that pay for basic benefits. Federal income tax to pay for the administration of the program and to provide the Federal Government for additional benefits. Collections of the State tax will be increased approximately 44% from 2009, according to the Ministry of labour.
Again, as a percentage of wages paid, unemployment insurance taxes are at historically low levels, less than 1%. When the unemployment insurance program began in 1938, for unemployment insurance tax rates average about 2.7% of wages.
Nevertheless, taxes higher in difficult economic times challenge business. States apply their tax rates high in these industries with a turnover of workers the most. Those who are often the same industries that are hardest hit by the recession, such as manufacturers.
In Florida, the minimum tax that is applied to enterprises with low turnover increased by about $25 per employee to $72 this year. The maximum tax for companies including high turnover remained at $378 per employee.
Companies could use taxpayers ' money to keep their doors open, or to expand and hire workers, said Teye Reeves, a Director of the Florida Chamber of Commerce policy.
"For our economy to prosper once more, we need companies to be strong," Reeves said. "They want to have more employees". They want to open new stores. ... They have the capital to be able to provide these jobs. ?
But Rick McHugh, employment National Law Project, has argued that legislatures should not consolidate their unemployment insurance programs by making workers to share the pain.
"It is not a situation of shared sacrifice because, certainly in most States, employer organizations put pressure to prevent properly funded programs in advance of the recession", McHugh said. "Now, they say that the program is broken, so we have to cut benefits."
McHugh said he was concerned that more States will seek to limit the benefits when the legislatures return to work next spring. Most have adjourned for the year.
"It is really a threat to the vitality of safety nets because each State feels the pressure to go to the lowest common denominator," said McHugh.
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