Springfield labor leader concerned about plan to cut unemployment
Posted December 21, 2015 in Selected Press
Bill’s sponsor says state must reform system to pay off debt.
Jobless benefits for Ohio workers could be cut by more than half under a plan by state lawmakers to shore up the state’s unemployment system.
But some critics, including a Springfield union leader, have argued the changes would harm many workers while doing little to fix the system.
State Rep. Barbara Sears, R-Monclava Twp., introduced House Bill 394 last month. It would cut the maximum time Ohioans could receive unemployment benefits from 26 weeks to as low as 12 weeks. The number of weeks would be based on the unemployment rate in Ohio at the time the application is filed.
Sears didn’t return calls for comment. But she said in a statement the legislation is needed to improve the solvency of the state’s unemployment compensation system.
Ohio is one of four states that still owe money to the federal government after borrowing to cover the high number of residents who received benefits when the Great Recession hit. Ohio still owed more than $700 million in early November.
“While the state is projected to pay off the loan by the end of 2017, it is imperative we reform our unemployment compensation system so that the trust fund has a positive balance, especially if the nation suffers from another recession,” Sears said in a statement.
Jason Barlow, president of UAW Local 402 that represents more than 1,100 workers at Navistar’s truck plant in Springfield, testified before Ohio lawmakers earlier this month on the bill.
The current law requires workers to serve a “waiting week” at the start of an unemployment claim before receiving benefits. Under the proposed changes, workers could be required to wait longer, Barlow testified, especially if they work in between periods of layoffs and earn more than unemployment pays.
But many manufacturing jobs in Ohio, including the truck industry, are cyclical with a flurry of orders one month, he said, and a lull the next. Workers at Navistar have been laid off, then recalled for weeks or months before being laid off again, each time earning more than state unemployment benefits, Barlow testified.
That means it’s possible affected employees would never receive benefits.
“That is unconscionable and wrong for all Ohioans,” Barlow said.
He also argued the proposed cut in the number of weeks residents could receive benefits could lead to more foreclosures and evictions.
“They should not be penalized in the event of a layoff,” Barlow said on Monday. “This is not a union or a non-union thing. This is about if you are working, you should be entitled to these benefits if you are displaced.”
But making reforms now will better prepare the state for the next recession, Sears said in a statement.
“While the unemployment rate is lower than it has been in years and speaks to the growth and progress the state has made since the recession, it’s necessary that the state pays back the loan taken out from the federal government,” she said. “Additionally, by reaching solvency and generating a positive balance in the trust fund, the state will be better prepared the next time a recession hits.”
During the Great Recession, federal lawmakers extended unemployment benefits, in some hard-hit states to as many as 99 weeks. Some economists believe those longer benefits prolong joblessness, raise unemployment rates and don’t stimulate the economy, according to the conservative Heritage Foundation.
One of the problems with the new legislation is it does little to pay off the state’s debt more quickly, said Zach Schiller, research director at Policy Matters Ohio, a left-leaning think tank that has studied the issue.
According to figures from the Ohio Department of Job and Family Services, the bill would cut more than $4 billion in benefits from unemployed workers between 2017 and 2025. More than $2.5 billion of that would act as a tax break to businesses, Schiller said, as opposed to paying down the debt.
That’s because fewer employees would be eligible for benefits, he said, and companies likely would pay less into the system in the future.
The real reason Ohio’s current system went broke during the recession is that it was underfunded for years, he said.
“They’ve taken an approach that misidentifies the problem,” Schiller said.
Original Article: http://www.springfieldnewssun.com/business/economy...