A Florida House panel passed a bill on Thursday that would reduce unemployment benefits and make them more difficult to access.
Supporters say the new law will bring certainty and fairness to the state’s unemployment compensation system and help create jobs.
The bill would shorten benefits from 26 weeks to 20 — if employment is above 9 percent (it’s currently at 12). Each drop of 0.5 percent in the unemployment rate would lower the number of weeks available by two, till unemployment reaches 5 percent. The law would also lower companies’ unemployment tax rates and make it easier for employers to prove employee misconduct, “irrespective of whether the misconduct occurs at the workplace or during working hours.”
“The goal is to make employment pay, not make unemployment pay,” David Daniel, a lobbyist for the Florida Association of Professional Employer Organizations, told the committee.
Florida New Majority, a progressive group based in South Florida, brought unemployed people to the hearing to tell lawmakers what they thought of the new law.
“They need to look at the people they’re talking about,” said spokesperson Natalia Jaramillo. “These are people who are struggling to make ends meet and to feed their families.”
Justina Martinez receives monthly benefits roughly equal to a third of what she earned working at Lincoln Marti School in Miami before she was laid off. She expects her benefits to expire after next month, she said through a translator. Claimants can be eligible for extended federal benefits, but not everyone receives the full allotment. If her benefits had been shortened by six weeks, they would expire this month.
Martinez has been struggling to find work, and with her reduced income, she gets by with the help of her two adult sons, one of whom is having his hours cut. The other son has two children of his own to provide for.
The maximum weekly unemployment benefit is $275 — Justina says she receives approximately half that. She doesn’t want to collect her meager benefits, which aren’t enough to get by, she told the committee. What she wants is a job.
Committee chairman Doug Holder, R-Sarasota, said that’s exactly what lawmakers are trying to do — put people back to work.
Reducing the amount employers have to pay for unemployment insurance would “make a difference across the board,” he said. The savings would make companies more likely to hire new workers. The new benefit levels are based on the idea that the new policies would induce businesses to expand in the state and create new jobs.
“The one thing that we have to do is show that Florida is a business-friendly state,” he said.
Rich Templin of the AFL-CIO labor union told the committee that unemployment was once considered a business-friendly program that allowed people who lost their jobs to maintain their spending power.
“Each one of these people is a potential lost customer at a local business cash register,” he said. What’s better for business: more customers, or marginal reductions in their unemployment taxes?
Ritch Workman, R-Melbourne, said the idea that “spreading wealth creates jobs” is “ludicrous.” High unemployment combined with generous benefits equals higher taxes and fewer jobs.
In congressional testimony given last year, Mark Zandi of the economic analysis firm Moody’s calculated the “bang for the buck” of various forms of economic stimulus. If $1 in tax cuts led to a $1 increase in gross domestic product, he gave it a “bang” of 1. These are policies at the federal level, and they measure policies’ effects on GDP, not job creation. It’s also not clear how they account for increases in unemployment taxes paid by businesses.
Still, he found that temporarily extending unemployment had one of the largest bangs among the policies he studied — 1.62, trailing only increased food stamp benefits and federally financed work-share programs. A permanent cut in the corporate income tax, by comparison, carried a bang of 0.32.
Unemployment taxes are set to increase for Florida companies because the state needs to pay back $2 billion in loans from the federal government that kept its program afloat during the economic downturn. The minimum tax rate for companies participating in the unemployment insurance program is set to rise from $8.40 per employee in 2009 to $72.