Goldwater Institute Opposes Jobless Benefits Increase

Posted on December 16, 2003 | Type: In the News
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A new study commissioned by the Phoenix-based Goldwater Institute think tank calls for the elimination of the federal unemployment tax on employers and opposes proposed increases to state unemployment insurance benefits.

The study, which will officially be published next month, was conducted by Oregon economist William Conerly.

Conerly said Tuesday federal and state UI policies do not encourage those laid off to return to the work force in a timely fashion. The study wants states like Arizona to experiment with reforms and to dedicate more resources and face-to-face contacts with displaced workers. Conerly cited federal audits that show many of those recipients receiving UI benefits are not qualified to and that Arizona paid out as much as $60 million in overpayments in 2002.

"Our system doesn't help the unemployed very well," said Conerly, who also wants Congress to let states experiment with individual UI accounts for workers. Chile has embarked on such an IRA type system for both social security and unemployment insurance.

Conerly supports a Bush administration proposal to eliminate the federal UI tax and turn the current two-tiered funding systems completely to the states.

He said that could result in tax cuts for businesses because many states will not increase their own unemployment levies to the full amount currently covered by the federal government.

There was a push last year to raise the maximum weekly UI benefit in the state from $205 (the lowest in the nation) to $240. The measure passed the Legislature and had the support of the business community because of some stiffer eligibility standards and tax benefits for companies that do not lay off workers. However, unions did not like the tougher eligibility requirements and Gov. Janet Napolitano vetoed the package, angering business groups like the Arizona and Greater Phoenix chambers of commerce.

The main sponsor of last year's UI bill, state Sen. Carolyn Allen, is expected to bring the issue up again and next year. The Children's Action Alliance supported last year's effort will again support hiking the weekly benefit to $240 to helping working and poor families, said Elizabeth Hudgins, a senior program associate for the Phoenix-based advocacy group.

Conerly said hiking the state's maximum UI benefit will encourage people to stay on the rolls longer and for additional applicants to apply for help.

He also wants more money dedicated to state services and resources that help the unemployed find work and for broader UI tax ceilings and floors to further benefit companies that do not lay off workers and impact those that do cut jobs.

(R) 2003 American City Business Journals Inc.

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