Better jobless benefits can help get folks back to work

From the Everett Herald:

John Burbank, Executive Director

Big business is banking record profits now, but for the rest of us this recession isn’t going away anytime soon.

In Snohomish County, one out of 10 workers is unemployed, and that ratio hasn’t changed for the past 12 months. So we should be thinking about how to create jobs, and that doesn’t mean more handouts to the corporate sector. Washington has nearly $4 billion in corporate tax breaks on the books already — but so far they aren’t creating jobs, at least not here.

How do you create jobs? Ironically, by bolstering unemployment insurance. That’s right. Every penny of unemployment insurance gets spent on food, rent, clothing and the other necessities of life. The Department of Labor estimates that every $1 in unemployment insurance puts $2.15 of purchasing power on the street. That money isn’t used to speculate in stock markets around the world, and it isn’t spent in China on new factories that replace U.S. manufacturing. Instead it is spent right here in Washington. Now that’s a job creator.

In Snohomish County, fully 37,000 workers are unemployed. Of these, one out of four did not receive any unemployment benefits. The unemployment insurance system is not seamless, and a lot of workers who should qualify for benefits don’t. And currently, none of the children of unemployed workers are taken into account when benefits are calculated.

The average unemployment benefit is $367 a week. That is equivalent to 56 cents more than the minimum wage. Benefits are not generous — your income is cut in half overnight, right to the cusp of official poverty. And of course, you have lost any employer-paid health coverage you might have had. So add to the grocery bills the COBRA costs for continued health coverage.

Now how about if you just lost your job and you are juggling a toddler and a first grader? About one out of three unemployed workers — 12,000 in Snohomish County — are in this situation. They are the breadwinners for their families, which include kids. Right now, we are effectively saying to them, “Good luck when it comes to the grocery bill!”

Unemployment insurance isn’t much of a cushion. It’s more of an underinflated air mattress that leaks. Most benefits run out after 26 weeks. The federal government has extended benefits in this continuing recession — but still, 1,000 workers in Snohomish County run out of benefits each month. They become “discouraged” workers — unemployed, but not counted as part of the workforce.

The maximum unemployment benefit is no picnic either, at just $570, less than two-thirds of the average weekly wage. The minimum amount is outright starvation: $135. That is $75 below the poverty level for just one person! It is no wonder that the total poverty rate grew to 12.3 percent in the past year; today, one out of six kids in our state lives in poverty.

So state Rep. Mike Sells, D-Everett, with help from Rep. Mary Helen Roberts, D-Edmonds, has been shepherding a bill through the Legislature that takes into account family values, economic reality and job creation all at once.

Sells has a good reason: About 12,000 workers receive unemployment benefits just in his district. But none of them get any help for their kids. His bill, modifying the unemployment insurance program, will add in $15 weekly payments for dependents of unemployed workers, up to a total of $50. Each $15 will put $32.35 into the local economy. All told, these benefits would generate $80 million in economic activity a year, resulting in at least 1,000 new jobs.

You would think this would be a slam dunk. After all, Washington’s unemployment trust fund is the healthiest in the nation, with a balance of almost $2.5 billion. Sells’ legislation reduces unemployment insurance premiums, so businesses save more than $300 million in 2011. The proposed dependent allowance will cost about one-eighth of that, or $37 million a year. And even that is offset by a grant of $98 million from the federal government just for including this benefit in unemployment insurance.

It is a win/win not just for workers, but also for our children, our main street businesses, and our economy.

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2 Responses to Better jobless benefits can help get folks back to work

  1. Pingback: News Roundup – February 8th, 2011 :: StopGreed.org

  2. Ron says:

    hello, not many people comment here, but i have something to say; i have been on the unemployment since july 09. and now it is august 13, 2011. i was smart to wait to apply for my unemployment as long as i could hold out because i could foresee this disaster going in. i have a bachelor’s degree in electronic engineering. after i was laid off the FIRST time in 2004, i cross trained in fast-track training program in Microsoft .net – i nabbed my first .net job in 2006, where i leveraged my electronics side together with .net and where i was tasked to create automated test systems for various clients. this worked well for 3 client companies until i was laid off from MS Xbox in july 2009. i have not worked since that time! i have taken action to improve my skills on my own ; increase various skill sets, got new development tools at Christmas time, and using them on various demo projects that i show at interviews and to any parties who are interested at seeing them. some of the work that i do is sort of coalescing into a possible product/service for the electronics test and measurement industry.

    the past couple of weeks have had more activity than probably the past 3 or 4 months. i already have had interviews with previous employers and others. also i have had experience of the interviews out of state and currently being evaluated for positions as far away as Connecticut(because the unique mix of my skill set is not used that much here(hardware / software automation design for quality assessment of end product), but much more on east coast). i have phone interview on monday with Fluke for a manufacturing test engineer position here in Everett.

    another comment, i sort of like what Newt Gangrich had to say about unemployment benefits; he thought that it would be better spent by getting us unemployment folks hired on at companies taking into account our current skillsets and provide for on the job training. I agree with him on this, i would much rather be ‘working’ at a reduced salary for a while with money provided for my upgraded ‘on the job’ training than be without a job and benefits.

    I have about 4 weeks left now on my unemployment benes and i have nothing to fall back on, wish me luck!

    Ron

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