Arizona's jobless benefits are pitiful, need changing
By David Wells
Arizona Republic My Turn Column
http://www.arizonarepublic.com/opinions/articles/0419wells19.html
April 19, 2002
If you lost your job, how many months would pass before you also faced losing
your car, your home, your marriage, perhaps even your sanity?
As unemployment rises, so does depression, domestic violence, divorce and
substance abuse. For those who lose their job through no fault of their own,
unemployment insurance compensation may not fully replace a paycheck, but
never has it been more needed. Unfortunately, although robust economic growth
has given Arizona a healthy billion-dollar unemployment trust fund surplus,
Arizona's benefit levels have fallen to 49th in the country.
Legislators have an opportunity to reverse that with Senate Bill 1208, but will
they rise to the challenge?
Before moving here, I became unemployed when my one-year, $28,000 contract
expired in June 1997. My unemployment benefits from Ohio replaced 48 percent
of my former salary. My wife was emotionally supportive, but as the months
passed unemployment and the emotional energies spent finding a job played
havoc with my sense of self-worth.
Although we had no car payments and my wife worked part time, we struggled
to make ends meet, and we had to pay an extra $200 monthly to maintain health
benefits from my former employer.
Collecting benefits from Arizona would have been far worse. I would have
received $260 less a month after taxes. Although Arizona's legislation mirrors the
federal principle of replacing half of lost wages, our low maximum benefit means
most workers receive far less.
Arizona's maximum unemployment insurance benefit is only $205 a week, just a
few dollars above Alabama ($190) and Mississippi ($200) and well behind our
neighboring states New Mexico ($277), Nevada ($301), and Utah ($365).
There was a time when the Legislature did right by unemployed workers. From
1981 to 1992, legislators increased the maximum benefit to $185 a week from
$95, boosting to $19,000 a year from $10,000 the maximum qualifying earnings
from a former job before benefits capped out.
Did this come at a great cost to employers? Even though employers pay into a
state trust fund that finances benefits, thanks to a strong economy, employer
costs declined.
Typical employers paid $90 per employee per year in 1981; by 1992 this had
fallen to $79. Employers pay far more just to cover annual increases in health
insurance premiums than for unemployment insurance taxes.
Today, after another decade of strong economic growth, typical employers pay
only $56 annually per employee. But since 1992, the Legislature has increased
maximum weekly benefits by a measly $20. Benefits compared to wage levels
have sunk below 1981 levels to their lowest point since the program's inception
in 1938!
This year, with a billion-dollar surplus in Arizona's unemployment trust fund (that
can't be tapped for other purposes), and a recession heightening concern toward
those who lost their jobs, you'd think that legislators would be eager to increase
benefits.
Apparently not. Sen. Ed Cirillo, R-Sun City West, has repeatedly offered bills to
improve benefits for the unemployed only to have legislators kowtow to the
business community's concern over higher taxes.
This year Cirillo continues to champion the unemployed with SB 1208, which
raises benefits in steps to a $300 weekly maximum in July 2003, increasing the
qualifying earnings before benefits cap to $31,000. He has also included a
$25-per-dependent benefit (up to four and capped at the maximum benefit) to
further support unemployed workers with children.
Recently, the bill barely cleared the Senate 16-12, with the Arizona Chamber of
Commerce lobbying senators to oppose it. House members need to step up and
support SB 1208. The cost to Arizona of inadequate unemployment benefits far
exceeds the modest tax employers bear.
No one wins when we place unemployed workers and their families at greater
risk of financial crisis, domestic violence, divorce, and substance abuse.
David Wells teaches in the Interdisciplinary Studies program at Arizona
State University. Reach him at david.wells@asu.edu.