From: Pamela Weiss
Received: Jan. 7
As the 2013 legislative session gets under way, the Republic reports that Rep. Milo Smith is proposing changes to unemployment benefits. The Jan. 6 story explained that a person may turn down a full-time job that pays less than what unemployment benefits do, because he loses the difference between the wages and the state benefit. Rep. Smith wants to “encourage people to stay off the system” by paying them some money if they took a job that paid less than the maximum weekly unemployment benefit.
I cannot blame unemployed workers for not taking lower-wage jobs while collecting unemployment benefits. They are going to make the choice that best benefits their family. Only if they are financially better off by accepting a job does it usually make sense to take the job. It is therefore incumbent upon the system to change the work incentive that pays less than unemployment benefits but would overall cost the state less in total unemployment benefits.
I applaud Rep. Smith for tackling this issue.
Before implementing policy changes, legislators should consider another job-compensation issue: health care benefits. An unemployed worker may have children receiving Medicaid benefits that are more generous than what a lower-paying employer may offer in health insurance benefits.
I can think of a family in which the unemployed worker, a computer programmer, has turned down contract jobs that pay even above unemployment benefits. Why? After factoring in the loss of Medicaid benefits for his five children and the high cost/low payout of the contractor’s alternative health care plan, he determined that financially his family was better off on the unemployment plus Medicaid.
Again, I cannot blame him for his choice. He is trying to provide the best situation for his family. If government would prefer people like him to take the job offer, there needs to be some bridge to cover increased health care costs coming off Medicaid.
I wish the Legislature all the best in formulating a plan that will give people an incentive to accept work while understanding that health care is a vital piece of an unemployed worker’s decision making.