09/02/2008
Warning! Deep breathing required
You might want to sit down and take a long, deep breath because what you're about to read is probably going to make you mad.
Fact: The Indiana Unemployment Insurance Trust Fund is going broke and will most likely run out of money during the first quarter of 2009.
Of course, this is not news to NFIB members. There have been whispers in and around the Statehouse for months about the trust fund and its dire straights. The state has now confirmed that legislation will be needed to correct the insolvency.
You may be thinking that this situation is a result of a slowing economy forcing businesses to eliminate jobs. More people unemployed equal a fund running dry. Right?
Wrong. There are a number of factors affecting the fund, but a softening economy is not the trigger causing the fund to go broke. According to Teresa Voors, the Indiana Department of Workforce Development Commissioner, the trust fund would run dry even if the unemployment rate was at 3 percent. (The unemployment rate is currently 6.3 percent.)
So, if it's not the economy, what is it? (This is where you need to make sure you are sitting down.)
Did you know that many big businesses lay off employees on a regular basis, as a matter of routine? (For example: two weeks in July and two weeks in December)
Did you know that these seasonal layoffs are built into these firms' business plans?
Did you know that with these planned lay-offs, the employees of the large firms utilizing this strategy take out much more from the fund than their employers ever pay in?
Did you know that employees who are members of a union don't have to follow the same job search rules that non-union employees have to follow in order to collect unemployment?
Did you know that this waiver allows union members to simply check in with their union hall to see if there are any available jobs? No need to seek employment elsewhere in the open market to continue to qualify for benefits.
Did you know that Indiana is one of the few states where employees do not pay into the system?
Did you know that non-teaching employees (bus drivers, cafeteria workers, etc.) of school corporations can collect unemployment benefits for nearly three months of the year?
Did you know that small employers are reluctant to lay-off employees and probably pay way more into the system than their employees ever receive from the fund? (I'll bet this one is not a surprise to you, Mr. or Ms. Small Business Owner. We're the ones who keep our employees till it hurts. We're the ones who sacrifice our own paycheck so we can hold on to the employees we treat like family.)
Did you know that as this fund is evaluated, there are calls to raise benefits for recipients, raise the annual employer payment per employee, raise the average employer contribution, raise the taxable wage base, and ultimately, raise your taxes?
Hold on to your wallet, small business owner. Your pocket is about to be picked.
Keep breathing. I'm almost done.
The facts: Is the fund about to run dry? Yes. Benefit costs are exceeding revenues by $200 million a year. Will Indiana need to do something about it? Of course.
The 200 million dollar question: Who will pay for it?
Will the ones who are draining the system pay their fair share? Will we trim waste, tighten eligibility provisions, freeze or reduce benefits? Or, will we simply hand the bill to the ones who are creating most of the jobs; the small business owners of Indiana?
Now I ask you: Shouldn't the increased cost be born by those who use (and in some cases, abuse) the system?
Lots of questions and I don't have all the answers. I do know that small business owners will need to raise their voices during this coming legislative session. This is just the beginning, NFIB members. I will need your help. I would love to hear your unemployment insurance stories and any experience you wish to share.
Whew! You can tell I have some energy on this subject. Thank you for listening. You can stand up now and breathe normally.
Dates to remember
Oct. 7: NFIB/Indiana Leadership Council meeting.
Skyline Club, Indianapolis, Ind.
Oct. 9: Last day to register to vote in the November elections.
And furthermore
Please give me your feedback. I enjoy hearing from you and I appreciate your comments. Thank you for being an NFIB member and for reading "Capitol Capers."
Barbara Quandt
NFIB Indiana State Director
317-638-4447
Barbara.Quandt@nfib.org
