Things are about to get worse for as many as 190,000 Georgia families struggling to make ends meet because of unemployment. Starting in July, unemployed Georgians will lose between $260 and $1,820 in unemployment insurance payments due to a new law passed this spring by the Georgia Legislature.
And temporary federal unemployment benefits, which kick in after state benefits expire, are ending this December – unless Congress acts. That means a Georgian laid-off in August will likely only receive a maximum of 19 weeks of unemployment benefits, at a time when the average unemployed Georgian is out of work for more than 40 weeks.
While Georgia corporations will pay a bit more into the unemployment trust fund under the new law, they will also get a permanent break on a surcharge they pay, which will deprive the fund of more than $400 million.
The new state law is designed to raise money to repay the $746.8 million Georgia borrowed from the federal government to meet its unemployment insurance obligations during the recession. But that borrowing was not the fault of Georgians who lost their jobs. It was largely needed because lawmakers handed corporations unemployment tax breaks and tax “holidays” for years, draining more than $3 billion from the fund used to pay state unemployment benefits. Georgia companies continue to pay less in unemployment taxes than their counterparts in almost every other state.
Despite this history, Georgia lawmakers turned to unemployed workers to bear most of the burden of repaying the debt. The new law cuts the maximum weeks of unemployment benefits to the lowest in the country – from 26 weeks to a range of 14 to 20 weeks, depending on how high the state unemployment rate is.
Businesses face only a modest contribution increase — six months from now –which pales in comparison to similar boosts in other states. Starting in 2013, Georgia employers will make contributions to the unemployment trust fund based on each employee’s first $9,500 in wages, compared to $8,500 now. This is the first increase of that type in more than two decades, and it’s still well below the $11,000 average of other southern states.
Employers should pay their fair share, so that workers who lose their jobs through no fault of their own aren’t further punished. This law can be fixed by raising the taxable wage base to $11,500 and restoring the maximum weeks of state unemployment insurance benefits to the historic standard of 26 weeks.
As Kathy Floyd, a colleague from AARP said, we all like to take vacations and holidays, we just don’t expect our neighbors to pick up the bill. Employers have enjoyed tax breaks and tax holidays for too long. Let’s not ask the unemployed to pick up the tab.