[PEN-L:33625] Unemployment Insurance

["Devine, James" <jdevine@xxxxxxx>]

Title: Unemployment Insurance

Ellen writes: >the plan is also said to contain funds for "re-employment" rather than "unemployment" insurance. The idea is that the unemployed would receive a lump-sum payment which they could use to seek work or retrain.  If they find work right away, they keep the money.  This, supposedly, eliminates the  "incentive to remain unemployed" of the current UI system.  <

some labor economists argue that many businesses like UI because it prevents laid-off workers from taking jobs elsewhere. It keeps them around to be rehired later, so that the biz doesn't have to spend money on re-training and the like. But the trend has been away from temporary layoffs toward permanent layoffs (and the hiring of temps, who aren't counted as "unemployed" and don't get UI benefits when waiting for a call). This trend seems to have undermined biz support for UI, as has the fact that UI taxes make employment more expensive to them while businesses have had a hard time passing this cost onto consumers in recent decades.

Jim