States cutting unemployment benefits, hoping for more federal help

Source: Associated Press

Some of the states that have drained their unemployment insurance funds are cutting the number of weeks that a laid-off worker can count on those benefits. Legislators are trying to limit tax increases for businesses to replenish the pool and are hoping the federal government keeps stepping in when the economy slumps.

Michigan, Missouri and Arkansas recently reduced the maximum number of weeks that the jobless can get state benefits. Florida is on the verge of doing so. Unemployment in those states ranges from 7.8 percent in Arkansas to 11.1 percent in Florida.

The benefit cuts come as legislatures deal with the damage that the recession inflicted on state unemployment insurance programs. The sharp increase in the number of people who lost their jobs drained the reservoir of money dedicated to paying out benefits.

About 30 states borrowed more than $44 billion from the federal government to continue payments to laid-off workers. Many states hastened the insolvency of their funds by keeping balances at historically low levels going into the downturn.

Read more: http://www.washingtonpost.com/politics/states-cutting-unemployment-benefits-hoping-for-more-federal-help/2011/05/22/AFLbJN9G_story.html

The solution is so obvious.

you make it more expensive to hire a worker. I'd rather that states use income taxes as a way to shore up unemployment funds.

In Texas, employers pay 1% of employee wages for unemployment. So if you have an $8 per hour employee working 2000 hours per year, your tax will be $160 for the whole year. If that's a problem, your business is not viable anyway. $3 a week.

compared to the places I've worked. You're right, in Texas, those taxes are not a disincentive to hire. Please believe me that they might be elsewhere.

Right now, employers are coping by having part time workers go full time (if they feel they can afford the benefits), and having full timers do a bit of overtime, which doesn't raise their benefit costs or unemployment taxes, which are capped on a fairly small wage base. We need to get more people to work, and in some places, raising the unemployment tax works against that.

RC asked what was the big deal about that, and I'm trying to provide an explanation. I'm glad to see that it's a poor excuse where you are, but it doesn't work out that way all across the country.

26 weeks of benefits in order to get assistance.

if you're profiting from going off to "harvest slave labor globally" then you

can pay up for the damage you've left behind!!