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January 7, 2010
How About the Philosophical Questions?
Part of our problem, in Rhode Island, is that our political class likes to treat each issue separately. It focuses on whether policy A is good or bad, but rarely considers whether funding A ought to have implications of the funding of B, C, and D. In other words, our elected officials don't like to answer large, self-definitional questions, which is to say that they aren't too keen on leading.
So, we get concerns about the solvency of our unemployment benefit system:
Even before the recession struck, Rhode Island employers had to pay a comparatively high tax to provide benefits to the unemployed.Now, with the state's 12.7-percent unemployment rate the second-highest in the nation (behind Michigan), and as thousands of out-of-work Rhode Islanders keep drawing benefits, the tax is higher — and could increase further.
The result could be a blow to businesses at a time when many are struggling just to survive, said state Rep. Steven M. Costantino, D-Providence, chairman of the House Finance Committee.
"There's a potential that business, under these very difficult times, will be incurring an additional tax," he said.
And we learn that (as usual) our public services are generous in this area:
Rhode Island's maximum weekly unemployment benefit is set each year at an amount that equals 60 percent or so of the statewide average wage.As the average statewide wage rises, so does the maximum amount of benefits.
This puts Rhode Island among the top states for benefits, according to a recent report prepared by the Department of Labor and Training for a state advisory board.
The first link describes various mechanisms that will force taxes on RI businesses up with continuing high unemployment, but nobody asks or offers opinion on whether the money necessary to assist down-on-their-luck Rhode Islanders who are generally productive should come from somewhere else. Government revenue is fungible, meaning that the unemployed and the businesses that would like to employ them are not the only sources of revenue. Maybe, just maybe, it's time for our state to begin considering whether civic survival might have to come at the expense of benefits to which certain of its residents have come to rely on a long-term basis.
Perhaps it's possible to defend, on moral grounds, the proposition that the government should not allow maintenance of the lifestyles of working and middle class unemployed to eat into the resources allocated for the less fortunate, and maybe it's defensible, on political grounds, to argue that the government should protect against erosion of what it provides as an employer. Unfortunately, the practical reality is that not everybody can (or wants to) work for the government, and those who wish to work and prosper are not going to assent to descent onto the welfare rolls. They're going to leave.
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"There's a potential that business, under these very difficult times, will be incurring an additional tax"
Yeah, our business climate is way too friendly. We need to tax them more!! Go get 'em Stevie!
"Constantino, good pasta, bad politics."
Posted by: Patrick at January 7, 2010 10:21 AMI've been trying to figure out how the lunatics in this state (progressives being the worst) can keep digging us deeper into the same hole with higher taxes, more regulation, and bigger government, and actually think they are doing something productive. As far as I can tell from speaking with them, this is their Utopian vision of Rhode Island:
-10% work in the private sector, which is super-productive because of all the stimulation and regulation from government and "green technology"
-The other 90% work for the state in some capacity in generously compensated public jobs, funded by the super-productive private sector individuals, providing all of society's service needs
It is madness, pure and simple, and they will never, ever stop until they have destroyed the state. Of course then it will be a "failure of the free market" according to them, which will justify even more government interventionism (see how that circular logic works?).
When asked why Rhode Island is doing so poorly compared with nearby New Hampshire or other states, you get some long-winded answer about coincidence, geography, greedy companies (what companies?) and demographics. Surely it has nothing to do with Democratic or progressive public policy. It couldn't possibly be that.
Posted by: Dan at January 7, 2010 12:09 PMPlease take the time to understand how the unemployment insurance system operates. It is NOT a welfare system. To qualify, one must have WORKED and earned benefit credits to become eligible. Benefits are granted to those who qualify monetarily and lose a job and are terminated through NO FAULT OF THEIR OWN, i.e. layoff, RIF, etc. Folks who quit a job must have left for GOOD CAUSE; they do not automatically qualify for UI benefits. Employers and workers have a 2 step appeal process should the initial DLT decision be not in their favor. Recepients must establish their ability to work each and every week for which they receive benefits. In good times, with low unemployment, employers contribute less to the benefit fund,improve their profit picture, employees remain employed, pay taxes accordingly and everyone benefits. Now, employers and employees both take a hit as we all do in a down economy. UI recepients are folks with a work history behind them and for the most part would return to work tomorrow...if the jobs were there. They're not; which is due to systemic failure in several other areas of the economy. The UI program should not be confused with government funded social economic programs; it's employer funded and employers participate in the good and bad of the swings in the economy just as every taxpayer does. Unfortunately some choose to make a business decision, short term or long, to leave and take chances with the economy in other states. Thus the root problems of the economic slow down and job picture in RI needs dramatic attention; not the short term effect of higher UI rates on employers. One precludes the other.
Posted by: HopeforRI at January 7, 2010 1:06 PM