New Law Unfairly Burdens the Unemployed

Posted by Clare S. Richie

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.

 

Related Material:

HB 347 Reduces Unemployment Benefits for Georgia Workers to Repay Federal Loan

SB 447 Asks the Unemployed to Pay for Years of Employer Cuts

Bill Analysis:  Senate Bill 447 (LC 36 2103-EC)

Don’t Ask Georgia’s Unemployed to Pick Up the Tab for Corporate Tax Breaks

 

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3 thoughts on “New Law Unfairly Burdens the Unemployed”

  1. Pingback: HB 347 Reduces Unemployment Benefits for Georgia Workers to Repay Federal Loan | Georgia Budget and Policy Institute

  2. Pingback: New Law Unfairly Burdens the Unemployed | The Working Poor Families Project

  3. And of course, evrenoye who is unemployed is a lazy pig living off all of our teats.That’s a lot of people being really lazy out there. Millions of them. What to do with them? There’s always the Chinese solution, labor camps to make goods for the American market. They can work for nothing, and save companies and their shareholders labor costs.I still don’t blame the kid for not taking the dead-end 40 grand job. He did graduate first in his class. That doesn’t seem very lazy to me. Even if Grandparents paid his debt, he still earned that degree. Why shouldn’t he expect it to be worth something?Perhaps when the economy deflates further, he’ll get his comeuppance washing dishes somewhere for next to nothing.Perhaps the real problem is that people across the board are underpaid. Real wages for most people have stayed the same or fallen since the 1970s. And now, a lot of people who still work must take cuts in pay, hours, and/or benefits (I know a lot of them).I hear lots of moral outrage over poor schmucks getting a free ride (so it appears), but little outrage over the folks who looted the economy and nearly plunged the world into catastrophe. They did a lot more damage than all the welfare cheats put together and multiplied a hundred times over. And they’re getting away with it, loot and all.

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