Most media coverage of the flaws in Louisiana’s unemployment benefits system start with an individual, sometimes in tears but always angry, telling of six- or seven-hour waits on the phone and no check.
Louisiana Workforce Commission Secretary Ava Dejoie gets blamed if one unqualified worker gets paid and skewered if the required eligibility scrutiny delays benefits.
While she conceded Thursday, “We’re making folks jump through more hoops,” Dejoie is following the dictates of lawmakers who continue to borrow money to keep afloat the trust fund that pays for it all.
It’s not just Louisiana. Every state has its own labyrinthine rules.
Unemployment insurance was developed in 1935, at the height of the Great Depression, to give laid off workers enough money to put food on the table and keep a roof overhead. Basically, businesses are required to contribute a portion of their employee’s wages into a fund that is used to help those workers when they are laid off through no fault of their own.
Unemployment Trust and Federal Loans analysis by Congressional Research
States were allowed to do what they wanted provided they follow some fairly lax federal standards that were put in place years ago when America was a much different place.
Over the years as the competition to attract businesses intensified, states went lower on all taxes, including minimizing the contribution to UI funds, which in turn required states to come up with hurdles that limit which unemployed workers get paid, and how much.
Back when about 2,250 Louisiana residents were filing unemployment benefits, as was they were in March 2019, the state’s clunky system worked fine. But this time last year, 72,620 Louisiana residents filed claims for the week ending March 21. Unemployment rates peaked at 15% of the state’s roughly 2 million workers.
The state’s healthy unemployment fund, which had been about $1 billion, is now empty, prompting the state to borrow from the feds.
Hundreds of thousands of Louisiana workers will continue to receive a $300-a-week boost in unemployment benefits from the feds after a massive…
The way it’s supposed to work is that taxes on businesses go up and payments to workers go down until the fund stabilizes. Not wanting to hurt both businesses and workers in a struggling pandemic economy, legislators suspended that law. The Revenue Estimating Conference could trigger higher taxes and lower benefits if they officially recognized the amount in the fund. They haven’t.
The talk among legislators and Gov. John Bel Edwards’ administration is that part of the money for local governments from the $1.9 trillion stimulus money approved Thursday will be used to replenish the state’s unemployment trust fund and pay back the roughly $140 million borrowed to pay claims.
Grateful though he is, Louis Reine, president of the state AFL-CIO, says the additional federal bucks that have come in over the year to increase unemployment benefits and expand who can receive the checks has also covered up the flaws in the system. “Not only did it cover it up, but it exacerbated it,” he said.
Thinking back to the last time an economic crisis depleted the UI fund, Reine added: “We knew back in the ‘80s when we had a problem that we thought was dramatic. We patched it (with federal dollars) and we never really fixed it.”
Louisiana Senators Bill Cassidy and John Kennedy voted against the $1.9 trillion coronavirus relief bill that the U.S. Senate passed Saturday.
Many believe that the federal largesse will allow Louisiana to once again duck significant changes.
“If they can first fix the delivery system and raise the benefit levels, only then should they bail out the trust fund,” said Jan Moller, director of the Louisiana Budget Project, a Baton Rouge-based group that advocates for low- and middle-income families.
Step Up Louisiana, a New Orleans-based group representing low-income people, recommended Tuesday legislators increase the state’s maximum $247 per week benefit — the second lowest in the nation — by at least $100 to put Louisiana in line with regional averages. The Texas maximum is $535. Arkansas pays $451 per week. The group also suggests expanding the rules to allow the unemployed to take part-time jobs without losing benefits and to make eligible gig workers and low-paid educational contract employees.
But lawmakers last year defeated legislation that would have done just that. The Louisiana Association of Business and Industry backs changes to make the system more efficient but “opposes legislation that would expand UC coverage,” according to the influential group’s website.
And that’s why some argue the only real fix will come from Washington.
“I don’t believe it’s fair to expect the folks in Louisiana to able to fight their way through a statehouse that is so unresponsive to workers’ needs and get the solutions you need. We have to have federal leadership to fix this problem,” said Rachel Deutsch, a supervising attorney with the Economic Policy Institute, a Washington, D.C., think tank that analyzes the economic impact of economic policies on working people.
New jobless claims across Louisiana dropped last week to 5,679 from 6,447 one week before, according to U.S. Department of Labor data released…