On the surface you’d think charging employers more for their unemployment tax would be the most appropriate thing to do to increase the amount of money available in the state’s unemployment.
Here’s the challenge.
The Senate Republican plan would raise the maximum rate to 8.2 percent. The taxable wage base would increase from $7,000 to $10,000.
By increasing the amount an employer has to pay into the plan for every person they currently have employed, you’re increasing the cost of the employer to stay in business. How many employers now might layoff another employee or two just to afford the cost of paying up to $350 more per employee into this fund.
Then there’s more unemployed people using up the fund. Vicious cycle I see starting there.
Of course the other problem with the unemployment fund is that you’ve got people claiming unemployment that could be employed, but they’ve got more money coming in from unemployment than they do by getting a job that pays minimum wage.
Why would anyone take a job and actually work to make less than they could by just sitting at home on the couch and submitting a few applications for employment here and there to prove they’re "looking" for work.
You’ve also got the people in the system who are double-dipping. Collecting unemployment but working somewhere, for someone and taking money under the table.