Business Lobby Pushes to Cut Mass. Unemployment Insurance: What you need to know

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Call your legislator now - Tell them you don't want unemployment cuts with a minimum wage increase.

Then sign up to volunteer to make sure the Massachusetts Legislature passes a strong minimum wage bill -- without compromising the safety net for the unemployed. 

 

Many think of unemployment insurance as a benefit/safety net only to the person who is collecting it. Some even go so far as to suggest unemployment benefits (which amount to 50% of your paycheck for a finite number of weeks) are a cushy hammock for the lazy. But in truth there is a much larger reason for a strong unemployment insurance system -- keeping the economy moving.

Without unemployment benefits, the formerly employed workers would have to drastically cut spending on goods and services. As Paul Krugman says, many of the unemployed live “hand-to-mouth,” and cutting off the UI lifeline results in “lower overall spending — worsening the economic situation, and destroying more jobs.

Massachusetts has one of the strongest UI systems in the region; employees qualify for UI benefits after 15 weeks of work, and are entitled to up to 30 weeks of benefits if unemployed. 

We should be proud of our Massachusetts commitment to common-sense policies that benefit the community as a whole and provide economic stability to individuals. 

The economic stimulative role of UI is not in dispute.

It is why, during severe economic downturns, the federal government can step in and supplement state unemployment benefits, and why Pres. George W. Bush enacted federal jobless benefits extensions in 2008, granting up to 73 additional weeks (in addition to the first 26 weeks paid by the state employer UI fund).  Because of the sequester and Congressional teaparty intractability, those federal extended unemployment benefits are will end at the end of the year (Dec. 2013).

Cutting UI will have a disastrous effect on families, as well as the economy.

According to MassBudget, without Unemployment Insurance benefits, 3.2 million more people would have been in poverty in 2010. Slashing UI is “counterproductive as well as cruel; it will swell the ranks of the unemployed even as it makes their lives ever more miserable” (Krugman). And families in need, without UI benefits, are more likely to end up needing public assistance to get by, shifting costs from the earned benefits of UI to the tax-funded welfare system.

wasserman1201.jpgAnd yet, despite the risk to economy posed by unraveling the UI safety net, Massachusetts House Leadership is working overtime for the business lobbyists and pushing to do just that.

The Speaker has threatened to hold any (desperately needed) increase to the minimum wage hostage, in ransom for dismantling of unemployment insurance benefits.  

Business interests, including Associated Industries of Massachusetts and the  Mass. High Technology Council,  want to reduce benefits (down to 26 weeks from 30) and an increase in the time employed before eligibility for UI (up from 15 weeks to 20). While some say “Businesses needs a break so they can create jobs!”--in actual fact, the Legislature has done nothing but give UI breaks -- to businesses (see, “Heads I Win, Tails You Lose”). 

With stubborn unemployment making it as hard as ever to find work, and the looming end of the federal extended jobless benefits, the Democratic supermajority Massachusetts Legislature shouldn’t be talking about giving modest gains to workers with one hand (restoring minimum wage) while with the other hand, helping Paul Ryan to to snip workers’ --and the economy’s-- safety nets (gutting unemployment insurance).

Please SIGN OUR PETITION and MAKE A QUICK CALL to your State Rep -- ask your representatives to vote for a CLEAN minimum wage bill -- not one tied up with giveaways to the business lobby.

 

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