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The package of “extenders” that was just enacted by Congress and that will soon be happily forgotten by most observers actually represented a bit more than the act of legislative throat-clearing it seemed to be. Yes, the extension of the payroll tax cut, of Unemployment Insurance (UI) benefits, and the Medicare provider reimbursement rate “doc fix” were thrown together as must-pass items that neither party in Congress wanted the blame for obstructing. There was not a lot of public talk about substance, beyond conservative grumbling about the “dependency” involved in UI and the need for bigger changes in Medicare.
But as Annie Lowery of the New York Times usefully explains, the UI provisions of the package actually include some interesting reforms in a very old system:
The bill, which passed Congress on Friday and President Obama has said he will sign, allows states to use unemployment insurance money for programs that help move the jobless back into the work force. Such programs, like Georgia Works, often offer employers wage subsidies for taking on and retraining jobless workers.
The bill also requires states to reassess the eligibility of workers for their unemployment insurance — confirming, for instance, that a person receiving long-term benefits is actively searching for a job. That reassessment provides an opportunity to tailor career counseling and other re-employment services to the long-term jobless.
The bill additionally expands “work sharing” programs that can help reduce layoffs at big businesses. In effect, businesses would have the option of cutting the hours of five workers by 20 percent each, say, rather than laying off one worker. The business could then use unemployment insurance money to help supplement the workers’ wages to make up for the lost hours.
Though it seems a bit like a return to the policy debates of the late 1990s, when the economy was strong enough to make it useful to dwell on adjustments of skill levels to a fast-changing opportunities rather than simply maintaining a minimal safety net, the UI reforms in the extender package sound sensible. UI has not in any significant way operated as a “reemployment services” program, and it should. And wrinkles like “work sharing,” which is common in other countries, could have prevented unemployment from reaching and remaining at its current levels.
It’s obvious why none of us expect significant legislative activity, much less policy innovations, much less policy innovations supported by people in both parties, in the current climate in Washington. But the UI changes represent a small ripple of hope in a sea indifference, cynicism and obstruction. Pretty much anything beyond that will require big changes in the political configuration of forces.
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Vokoban on February 22, 2012 9:58 AM:
One would think something like work share would be considered a pretty huge thing, since a) it's a highly "socialist" idea coming from Germany and b) it helped this country a lot in overcoming the financial crisis without a huge bump in unemployment.
Did anyone sedate the Republicans before the vote?
HelpThe99ers on February 22, 2012 10:15 AM:
Some of the changes, like the work sharing and retraining program and the reassessment requirement, sound like sensible improvements to the system that will benefit everyone.
Others, not so much.
Cutting the maximum number of weeks of benefits, while long-term unemployment is still at historic levels, seems arbitrary. A better solution would tie benefits to a combination of metrics like unemployment rates and job openings.
Implementing drug-testing for benefits seems like adding insult to injury - if the results show that the unemployed are less likely to take drugs than the employed, will anyone push to drop the requirement as an example of excessive regulation?
winner on February 22, 2012 10:21 AM:
OK, I'm not here every day, but it was kind of irritating to have to figure out from context what the heck UI stood for. It doesn't even appear written out until the block quote well into the piece. I've never seen that abbreviation anywhere else.
winner on February 22, 2012 11:25 AM:
Glad to see the edit.
Bob G on February 22, 2012 11:30 AM:
Shared work plans are already implemented by 20+ states. Policies vary state-by-state, of course, so it will be interesting to see the details of the Federal standards.
The state plans are not limited to big businesses. Usually there's a minimum numbers of employees in a work unit are the pool for a shared work plan. The number can be as small as 5 in Conn., if I remember correctly. Hours must be reduced between 20 and 40% per employee. There are a few more requirements but also considerable flexibility once they are met. Conn. Dept. of Labor staff were very helpful with getting everything set up when my company had to use shared work to reduce layoffs a few years ago.
Trollop on February 22, 2012 11:45 AM:
I think it is also a "sea of indifference, cynicism and obstruction" in the User Interface.
(:-)
Habernathy on February 22, 2012 12:25 PM:
I guess I'm still swimming in that sea of cynicism. My second thought about work sharing was how could an unscrupulous business owner use it? Are the five employees still considered full time? Are they still eligible for their benefits?
Quatrain Gleam on February 22, 2012 1:58 PM:
Question though: Lets say a business cuts the hours of 5 people 20%. Great. Now they are working less than full time and the businesses are not required to provide them with health benefits, right? The company saves on 5x benefits. All employees lose benefits and wages.
Or is there a provision to prevent this? Who wrote the bill? Who's bread is being buttered?
Meanwhile, is the company still contributing to unemployment insurance for the 5? Or is the state losing that as long as the employees are under-employed.
Bob G on February 22, 2012 2:30 PM:
@Quatrain Gleam, good points. Details on the new Federal plans are needed. I only know the CT state statutes and reg's. They require full benefits to be maintained, continued employer contributions to UI, and partial benefits to the employee proportional to the reduction in hours. If you lose 30% of your hours, you get 30% of full unemployment benefits. If state UI funds are depleted, UI tax rates go up for all employers. Employers with the biggest drew by their employees on UI benefits get the highest UI tax increases.
One purpose of shared work is to keep a company's employees in place through hard times so the company can ramp back up quickly when conditions allow. The reg's have provisions against hiring anyone full-time to replace someone held at reduced hours.
Crissa on February 22, 2012 4:14 PM:
In the states I've gotten UI from (Washington, mostly) I had to fill out a dance card with how many interviews I went on.
...And I had to go to mandatory 'leads' which were usually pyramid schemes.
How can we vote for this crap?