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Unemployed Are Not the Reason Unemployment Funds Are Broke

11:03 am in Economy, Financial Crisis, Government, Jobs, Media, Unemployment by dakine01

OK. I guess technically the title is not true. If folks hadn’t been laid off and collected Unemployment Compensation, the funds would just be sitting in the various state coffers, unused. But the unemployed are not the reason the economy tanked; the unemployed are not the ones sending jobs overseas; the unemployed are not the ultimate root cause of the problem.

Michigan started things back in March but has since been followed by Missouri and now Florida. (Other states may have done so as well, these three are the ones I know for sure have done this.) Florida’s new law actually goes beyond Michigan and Missouri, as bad as their laws are. Where MI and MO cut the maximum period for collecting state level unemployment compensation from 26 weeks to 20 weeks, Florida ties the benefits to the overall state unemployment rate. Via the Tampa Tribune article linked above:

TALLAHASSEE — Out-of-work Floridians would receive fewer state benefits while businesses pay less tax under a controversial proposal approved Friday by a divided Legislature.

The deal, which Gov. Rick Scott is expected to sign into law, immediately cuts unemployment benefits by 11.5 percent.

Jobless Floridians would continue to receive a maximum payment of $275 per week, among the lowest of any state in the country. But they would be paid for no more than 23 weeks, instead of 26.

…snip…

The bill also creates a sliding scale that cuts and adds weeks of benefits based on the unemployment rate. Unemployment compensation would drop to as low as 12 weeks if the average unemployment rate drops to 5 percent or lower. A week would be added for every 0.5 percent the jobless rate climbs.

I can guarantee you that the newly unemployed person is not going to give two shits to know that the overall state unemployment rate is X percent so the number of weeks of benefits are limited accordingly. All that newly unemployed person is going to see is s/he is out of work and the state supplied safety net is full of gaping holes. Annie Lowrey at Slate on Friday offered this analysis:

In March, Michigan became the first state to take an axe to its standard unemployment benefits, even though the state boasts one of the worst labor markets in the nation. The Republican government cut the number of state-sponsored, initial weeks from 26 to 20, effective in January. It said the state simply could not afford them: It owes the federal government $3.9 billion, borrowed to pay past unemployment benefits, and just cannot go further into the red. (Michigan and 48 other states have mandatory balanced-budget rules.)

For all the other states cutting back, the issue is inaction, rather than fiscal pressure. Some states needed to make a certain simple legislative fix to ensure that the federal government kept on kicking in its share of weeks of benefits—weeks of benefits already budgeted and paid for in Washington. A number of states failed to do so. So, on April 16, North Carolina, Tennessee, and Wisconsin all lost 20 weeks of federal benefits, effective immediately. Missouri did on April 2 as well.
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Trying To Avoid Incoherent Rage

11:49 am in Economy, Financial Crisis, Jobs, Unemployment by dakine01

As I read news sites across the toobz and see the occasional cable talking heads populated by the Beltway Village Idiots Pundits, it is often difficult to keep myself from dissolving into a mass of protoplasm due to simple rage.

First up today is this article from Reuters on Sunday, March 27:

(Reuters) – The U.S. labor market is finally improving, just when many of the other economic indicators are wavering.

Jobs are considered a lagging indicator. They typically recover many months after the economy comes out of a recession, and this cycle was no exception. So will troubles in Japan, Libya and elsewhere push up U.S. unemployment later this year?

…snip…

Friday brings the March employment report, and economists polled by Reuters are looking for growth of about 188,000 jobs, with the unemployment rate holding steady at 8.9 percent.

Any bets on how the headlines Friday will include some variant of “economists surprised“? I’m betting right now that the 188K figure will be way high for the entire economy. Of course, since the BLS jobs numbers will be first out this month ahead of the ADP Jobs reports on private sector jobs created for the previous month which appears the first Wednesday of each month, my bet will also be that the ADP report will be more positive than the BLS report so that will get all the good publicity next week and folks will forget the reality of the BLS report.

Sunday also had this article from the Boston Globe on Massachusetts going after the rail funds that Florida’s Gov Scottdemort rejected:

When the Obama administration awarded $10.4 billion for high-speed rail projects last year, Florida was a big winner, scooping up 20 times as much money as Massachusetts. But now that Florida’s new governor has rejected his state’s $2.4 billion for political reasons, Massachusetts officials are racing to make another pitch to Washington.
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My $.02 on Juan Williams

1:24 pm in Uncategorized by dakine01

Christopher Beam at Slate offers a quick discussion of the Juan Williams firing by NPR and makes a very key point that a lot of the folks whining about the firing seem to have missed:

Can news organizations fire reporters and commentators for anything they write or say?

Pretty much. The default labor contract in the United States is "at-will" employment, which means private employers can fire you at anytime for any reason, good or bad, or for no reason at all. (Slate employees, for example, are "at-will.") There are exceptions for discrimination based on race or gender, say, or retaliation for whistle-blowing. But you don’t have a Constitutional right to keep your job no matter what you say.

And there it is ladies and gentlemen. Employment at will is the world that must of us function under.

Welcome to the world the rest of us deal with Mr. Williams. Welcome to the world of no unions, no contracts and no recourse.