It’s been a long time at sea for some of the sailors on the Good Ship Government.
Barred from entering the ports of fiscal responsibility for the past 20 years, they sailed on, having to content themselves with hearty gulps from the rum jugs of resolutions and rallies.
But now they have struck it rich. Sitting at center deck in a richly bejeweled treasure chest is the loot from the Unemployment Insurance Fund. Finally, a chance to show those land-lovers back home that setting sail with the Compassion Crew would eventually benefit them too.
There is just one problem.
The coin of the realm flung at the masses is a familiar one , it’s theirs. Rewarding people with money robbed from them is a subtle art perfected by government.
This nautical metaphor for the Unemployment Insurance Fund, and what is happening to it, is an apt one.
California’s employers, like their counterparts in other states, pay an unemployment insurance tax. The purpose of the tax is to salt away money in the California Unemployment Insurance Fund for those rainy days of recessions when workers are laid off and in need of it.
The UI fund has stood California and its workers in good stead for most of a century, providing get-by income to people who lost their jobs through no fault of their own.
The method of financing and dispersing the UI Fund is the most direct and easily understood government program of all.
But there hasn’t been a real need for the UI fund during the boom-boom years of the 1990s. So, while the tax has remained, the demand for unemployment compensation has not been great. Ergo, the fund has distended with money into a nice, succulent amount.
The fattening of the UI fund is proving too tempting a potential feast for lawmakers to resist. Across the country, legislative bills are circulating state capitols that would use money from unemployment funds to pay workers , not the unemployed , to take time off for a spate of well-meaning reasons: the birth of a child, the adoption of one, the illness of a relative, and so on.
Remarkably, California, which has more than its share of enthusiasts wanting to be the first to lead the nation in something, has not yet had such proposals wend their ways through the halls of Sacramento.
That does not mean the UI fund is berthed at a safe harbor. Sen. Richard Alarcon has introduced legislation, SB-40, that would sever the rope tying the UI fund to its moorings and let it drift out into uncharted seas. Unlike attempts by other states to spread the wealth of their unemployment insurance funds, Alarcon’s initiative would spend lavishly on the unemployed, current and future recipients.
As it stands, SB-40:
– Boosts unemployment benefits by 77 percent.
– Lowers eligibility requirements.
– Allows benefits to be collected by striking workers.
– Allows federal benefits to be collected on top of UI ones.
– Hits employers with yet another penalty for not providing wage data within 10 days of hiring someone.
If anyone should doubt the legislative viability of such an absurd bill as SB-40, consider that a very similar measure passed both the Assembly and Senate last year before Gov. Gray Davis vetoed it.
Alarcon’s measure, however, might have a tougher swim through this legislative session. Employers, especially small-business owners, are reeling from the financial jolt of energy costs. A predicament, it might be added, due in part to the same lawmaking light bulbs that brought us deregulation.
Employers who pay the UI tax might throw up their hands in trying to do business in California, broken under the weight of not only it, but utility bills, health insurance costs, and innumerable other solvency threats.
The layoffs now occurring in our rapidly cooling economy are another barrier to SB-40. In short, that surplus the UI fund is running now might very soon come in handy.
The unemployment insurance tax and fund is working as it was designed to do. Furthermore, it is ready to handle any storm clouds of recession that might be gathering overhead ,provided of course, politicians can leave it alone.
Hopper is California director for the National Federation of Independent Business, which has 600,000 members nationwide and more than 30,000 in California.
