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Friday, Sep 22, 2023

COMMENTARY–Unemployment Insurance for the … Employed?

The unemployment insurance system is a safety net. It’s there for people who, through no fault of their own, become unemployed. It’s for the folks who are able, available and actively seeking suitable employment. It’s one of those ways in which government and society are saying, “A little tough luck shouldn’t keep you and your family from eating. We’ll spot you a few bucks until you’re back on your feet, as long as you prove to us that you are really trying.”

The money for unemployment insurance comes from payroll taxes paid by employers. And the money is used by all kinds of people. For example, a lot of laid-off autoworkers have used it.

If you have ever collected unemployment, you’re probably pretty glad it was there for you in your time of need. And you probably would have a hard time believing that the federal government wants to start doling out some of those unemployment funds to people who have jobs.

It’s true. President Bill Clinton recently directed the secretary of labor to write a regulation enabling states to use unemployment insurance for paid family leave time (time taken off for the birth or adoption of a child). This would mean a laid-off autoworker who is trying hard to find a new job after 40 years of working on the assembly line will have to share funds with moms and dads who are taking time off by choice.

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This idea completely violates the basic principles and intention of the unemployment insurance program. So why do people in Washington think it’s a viable idea? Well, as luck would have it, most states’ unemployment insurance funds are flush with cash. It’s that strong economy working again. And you know how the government has a hard time seeing money just sit there, not being spent. So this is a new way to spend it.

One of the biggest problems with this idea is that it takes advantage of a situation that is only temporary. The economy will turn down again. We can’t boom forever. And when the economy goes south, those unemployment insurance coffers will shrink, too. But the unemployed and the mommies and the daddies will still be lined up, waiting for their money. The only way to get more money will be, of course, an increase in taxes. Taxes paid by small employers who are already struggling to meet a tax burden that feels like a chokehold.

Now that I think of it, it probably won’t be just new parents. Because other groups will want their share of the pie: those who are taking time off to relocate, start their own business , who knows what they’ll come up with?

The bottom line here is that this is a bad idea and one that small business cannot afford. Unemployment insurance funds are there for people who fit into one narrow category, period. Any tinkering with the use of the funds is just wrong.

I rarely agree with labor unions, but I’m willing to bet that if John Sweeney asked his AFL-CIO members whether they like the idea of sharing unemployment funds with employed people, the answer would be a resounding “no!”

This bad idea doesn’t have to come to fruition. Tell your state legislators and your governor that you want UI left alone to do what it was meant to do: help out the unemployed.

Faris is president of the National Federation of Independent Businesses.


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