Our Opinion: Breaking the cycle of unemployment
Thursday, April 11, 2013
A vicious cycle that perpetuates unemployment was at the heart of two stories in Wednesday’s News Tribune.
Jobs were identified as a necessary component to fight poverty by the featured speaker at a Poverty Summit held Tuesday at Capitol Plaza Hotel.
Meanwhile, a few blocks away at the Capitol, the cost of continued unemployment was the focus of testimony before the state Senate’s Small Business, Insurance and Industry Committee.
Here is the confounding cycle outlined by state Sen. Mike Kehoe, R-Jefferson City.
The economic downturn in 2008-09 caused unemployment claims to soar.
Missouri is among states that assess businesses to pay those claims. When claims exceed assessments — which occurred in Missouri — the state borrowed money from the federal government to satisfy those claims.
Kehoe reported Missouri now owes nearly $595 million to the federal government, and expects to repay $210 million next month.
The loan is being satisfied by raising the assessment on businesses. The assessment now is $42 per employee and is projected to rise to $63 next year and $84 the year after next.
The alternative is approval of proposed legislation that would reduce unemployment benefits. The bill would reduced payment of jobless benefits from 40 weeks total to 20 weeks from July through December.
Spokesmen for social welfare groups and unions, however, fear the consequences of reducing unemployment benefits.
How do we break this cycle?
That is question faced by policy-makers, employers, social welfare agencies and others.
A consequence of reducing jobless benefits is increasing the ranks of the impoverished.
A consequence of increasing assessments for employers is reducing resources that otherwise might be used to create jobs.
The government safety net was not designed — and should not serve — as a catch-all.
Prosperity is an answer to poverty.
Policy-makers know that. That’s why their focus remains on economic development and job creation.
The focus is not an insensitivity to the plight of the poor, it is an emphasis on encouraging employment.
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