Douglas Administration “shares the pain”

I started working on unemployment cases back in the 1970's, even before I graduated from law school. This was partly because it is possible for nonlawyers to represent claimants in unemployment cases, and partly because of the vital importance unemployment benefits pose for unemployed workers. Representing unemployed workers in the unemployment system is fighting for workers' rights.

Like most states, Vermont's unemployment trust fund is in deficit spending because of the severe financial crisis that has hit the country. To the extent it's been caused by any local condtions, it is not because of overly generous benefits here in Vermont, but because of a decades-long policy of holding unemployment taxes down, a policy that subsidized employers by enabling them to pay less than they would have had to pay to keep the system on a sound footing.

Now that the fund is in trouble, the Douglas Administration is trying to “share the pain” by cutting eligibility and benefits for unemployed workers. That's right–when the administration looks around for someone to pay the bills, what better target than workers who have already lost their jobs?

National experts agree that this is not the way to go.

Vermont – The National Employment Law Project (NELP) today criticized proposals being considered in the Vermont State Senate that would cut benefits as part of a legislative plan to restore solvency to the state’s unemployment trust fund.

“The benefit restrictions are among the most severe being proposed in the entire country,” said George Wentworth, a policy analyst with NELP who specializes in unemployment insurance policy. “There are currently 34 states that have seen their trust funds go in to debt since the beginning of the Great Recession, but none has adopted a package of cuts as tough on the unemployed as the one proposed by the Douglas administration.”

NELP cited proposed changes to the formula for calculating an unemployed worker’s benefits as particularly harmful. In testimony before the Senate Finance Committee last month, Wentworth pointed out that only four states – Arkansas, Kentucky, Louisiana and West Virginia – use “the 4-quarter averaging” formula which drives down weekly benefits by placing added emphasis on any recent gaps in employment. The average benefit amount for an unemployed Vermont worker is currently about $304 – which ranks 25th in the nation.

 

In addition, NELP criticized the proposal to bring back the idea of a “waiting week” for unemployed workers – a provision that was repealed from Vermont law ten years ago. The proposal would impose a one-week disqualification on the first week of every claimant’s unemployment.

In his testimony last month, Wentworth noted: “At a time when over 40% of (unemployment insurance) claimants are unemployed for six months or longer, does it make sense to start every worker’s bout of unemployment by de-stabilizing the worker’s family finances? …Jobless workers get no waiting week on their rent payments, mortgages or utility bills.”

NELP spoke last month in support of proposed increases in the wages that are subject to unemployment insurance taxes and has cited Vermont as one of many states that did not engage in the necessary forward financing to withstand increases in jobless claims.

“The insolvency of Vermont’s trust fund is not the result of workers exploiting an overly generous system. Insolvency is the result of a prolonged recessionary economy and years of under-funding the UI system. …(T)hese cuts are not necessary to make Vermont’s trust fund solvent. They are merely further punishing the victims of a tough economy,” said Wentworth.

Earlier this month, NELP released “Understanding the Unemployment Trust Fund Crisis of 2010,” which lists the trust fund balance of every state and jurisdiction in the country as of March 31st, and estimates how many months of remaining funds each state has. The study found that, at the time of publication, 33 states had fully depleted their unemployment benefit funds, forcing them to borrow billions from the federal government in order to maintain the safety net for millions of unemployed workers.

7 thoughts on “Douglas Administration “shares the pain”

  1. I was stunned when I saw this report yesterday.  Jack you are right on.

    Now that the fund is in trouble, the Douglas Administration is trying to “share the pain” by cutting eligibility and benefits for unemployed workers. That’s right–when the administration looks around for someone to pay the bills, what better target than workers who have already lost their jobs?

    National experts agree that this is not the way to go.

    Thank you for blogging this and alerting the public to the fate of our fellow citizens.  While rich bankers like AIG and Goldman Sachs used fraud to create our country’s financial and employment debacle and they took our tax payer dollars to pay their obscene bonuses, our own hard-working Vermonters are losing jobs, facing a dismal employment market, and now the prospect of having their unemployment benefits cut severely.  

    Vermont – The National Employment Law Project (NELP) today criticized proposals being considered in the Vermont State Senate that would cut benefits as part of a legislative plan to restore solvency to the state’s unemployment trust fund.

    What has happened to human decency and our democracy?

  2. Like most states, Vermont’s unemployment trust fund is in deficit spending because of the severe financial crisis that has hit the country.

    but you salvaged and reversed me with the next sentence:

    To the extent it’s been caused by any local condtions, it is not because of overly generous benefits here in Vermont, but because of a decades-long policy of holding unemployment taxes down, a policy that subsidized employers by enabling them to pay less than they would have had to pay to keep the system on a sound footing

    .

    Take your pick of social programs that rely upon support from the money makers in our economy, none are paying their share.  A quick look at the stagnation in the contribution rate limits for social security and related programs points to the same protectionist agenda for profit margin and stock market performance where possible.  As long as the market is going up we are a prospering nation, who cares that the foundation of prosperity, the ability of a citizen to buy a washing machine, is being washed down the river.

    Unemployment Comp is as much workforce stabilizaation as it is compensation.  No more work, I move where it is, unless something can tide me over, so next snow fall our ski areas have workers available as do the road construction folks.  UC is a great benefit for areas where a lot of industry does not work year round…  The rates should go up, knowing in the end that it will be passed along to each of the users of that industry as an indirect tax included as an expense of running the business.  Corporate profit is nothing more than a user fee paid exclusively by the people or industries using the product…  it is unfortunate that people who use government get smacked with the exclusive word TAX in the payment mode.  

  3. You know, as a policy wonk, I have just about had it.  The stuff that flies at me all day, every day, is enough to shock me into a stupor.  Take a look at today’s New York Times and the chart embedded in the article on how the U.S. military is using Powerpoint (http://www.nytimes.com/2010/04/27/world/27powerpoint.html?hp), and you will get a flavor of why I am overwhelmed trying to understand the issues of Challenges for Change, the unemployment fund, property tax rebates, on the state level; and on the national level, financial system reform, health insurance issues, energy policy, war, war, war, etc., etc., etc.  

    I have finally had to back up and try to judge what is going on within a larger context, and within that context I recall something I read in Eduardo Galeano’s book Upside Down: A Primer for the Looking-Glass World.  In it, he wrote: “Over a century ago, the poet Jose Hernandez compared the law to a knife that never turns on those who wield it.”

    Indeed, you can say the same about power, and as I look at the congressional Democrats and perhaps more than a few Vermont Democrat leaders, I have to wonder about how they wield the knife of power and upon whom is that knife turned. (Please recognize that I am not giving the Republican Party a pass.  Its complicity in the injustices done to too many people throughout the world is simply without debate in my mind.)

    Too many Democratic leaders come from the comfortable class and have little true knowledge of the less financially-secure who live outside their small circle of privilege.  While they pose as defenders of the people, too many actually will never sacrifice their own advantages to advance justice for the many, particularly the poor.  

    Jack’s posting on Vermont’s unemployment fund is just one more drop in the on-going drip, drip, drip of Chinese water torture as the elite classes sacrifice public good on the altar of whatever terms they use to defend their actions.

    Nearly fifty years ago, the prophetic monk Thomas Merton wrote a controversial critique of whites involved in the civil rights movement.  It was a series of Letters to a White Liberal.  The essence of his critique is quoted below, but as you read it, where you see the word Negro, try substituting other words: perhaps, Poor, or Unemployed, or Women, or returning Iraq and Afghan War Veterans, or the Poorly Paid.  And then, think about the discourse among the elites at the national and state levels and judge for yourself the on-going validity of Merton’s critique in other venues:

    “Now, my liberal friend, here is your situation.  You, the well-meaning liberal, are right in the middle of all this confusion.  You are, in fact, a political catalyst.  On the one hand, with your good will and your ideals, your fine hopes and your generous, but vague, love of mankind in the abstract and of rights enthroned on a juridical Olympus, you offer a certain encouragement to the Negro (and you do right, my only complaint being that you are not yet right enough) so that, abetted by you, he is emboldened to demand concessions.  Though he knows you will not support all his demands, he is well aware that you will be forced to support some of them in order to maintain your image of yourself as a liberal. He also knows, however, that your material comforts, your security, and your congenial relations with the establishment are much more important to you than your rather volatile idealism, and that when the game gets rough you will be quick to see your own interests menaced by his demands. And you will sell him down the river for the five hundredth time in order to protect yourself.  For this reason, as well as to support your own self-esteem, you are very anxious to have a position of leadership and control in the Negro’s fight for rights, in order to be able to apply the brakes when you feel it is necessary.” — Thomas Merton

  4. At the same time the governor and (many in) the legislature are advancing this mean-spirited crap, they are about to give a special $5 million – $8 million tax break to one company (EH Weidman).  This multi-national was smart enough to simply threaten to leave unless the state ponied up.  It worked for Dealer.com (through VEPC) and no doubt others are in the wings.

    So glad the Leg. is living within its means.

    BTW – “perverse and immoral” are subjective so I’ll end with something a little more grounded; usually when someone “invests” millions in a company, the investor gets a promise of a share of the profits or repayment of a loan; in this case, the state gets a Laurel & Hardy handshake and a promise not to bother us until the next time; great deal legislature…

  5. The Douglas/Dubie administration has tirelessly promoted “Challenges for Change”. They’ve assured us that the only way we will save the state of Vermont is if we all “share the pain”.

    So I found it odd that Governor-wanna-be Dubie sent out a campaign contribution request yesterday that explicitly states how important it is to him that we overturn the “tax increases” passed by the legislature in the last session despite the Governor’s veto. It appears that candidate Dubie mimics Douglas’ preference to fight for tax breaks for people with capital gains and estates valued in the millions while asking the rest, especially out-of-work Vermonters, to “share the pain” by decreasing benefits and services.

    Why should tax cuts for a few be funded by benefit reductions for the many unemployed?

    How exactly is this “sharing the pain”?

    These are the types of questions one might reasonably ask a candidate running for the highest office in the state of Vermont, but Brian is no where to be found. I went to the “Brian Dubie for Governor” website and I found this:

    http://briandubie.com/blog/C11/

    It’s a page titled, “Category: Brian’s Posts”, and it contains nothing. Zip. Nada. Not a single post. On his own website.

    Brian Dubie, instead of fabricating reasons to avoid debate while simultaneously sending out campaign contribution requests, why not do as your website suggest we should and “Get Involved”?

    Crickets.

  6. And Douglas will give these tax breaks and everything only for the companies to take the money and run overseas as soon as they can.  But this is the way that the Douglas administration has been operating since it came into power — screw the helpless first.  

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