More on Unemployment

For those who gave me grief about how heartless I was when I wrote about reining in unemployment benefits recently, check out this article from the Montgomery Media.

It shows the ramifications of extending unemployment benefits.

From Montgomery Media:

The fund that doles out cash benefits to Pennsylvanians who have lost their jobs has cushioned the effect of the recession for untold numbers of state residents, but it has been operating in the red for some time, and the bill is about to come due.

Taken on its own, the Unemployment Compensation Trust Fund’s shortfall would represent a massive challenge. To shore it up, Pennsylvania has borrowed $3 billion since March 2009 from the federal government, and starting in January businesses will begin seeing higher taxes to help pay it back.

But add to the picture the recession-caused falloff in state revenues, a broken state budget process, the colossal public pension funding problem and the looming disappearance of federal stimulus money, and you can see why more than a few people in Harrisburg have remarked with wonder that anyone would want to be the next governor.

The jobless benefits trust fund ran out of money, in part, because it is fueled by a tax structure that has not been increased since the mid-1980s, even though the workers’ salaries that determine the amount of benefits have risen steadily.

The average benefit in Pennsylvania is about $310 a week, and benefits are capped at $564 a week.

And from later in the article:

Beaty said automatic triggers that go into effect in January will cost Pennsylvania businesses about $400 million annually for the next four years.

Even after that period is over, Pennsylvania will be on the hook to Uncle Sam for an estimated $7 billion.

Read the rest here.

As devastating as it is for the unemployed, we, as a country, cannot afford all the entitlements we are giving out. Our governments, whether state, local, or federal, have to rein it in.

Oh, by the way, according to the Montgomery Media, Pennsylvania has paid out more in unemployment benefits in the last two years than any state except California. Maybe it’s just a coincidence, but the article indicates that Pennsylvania is the only state  where the unemployed don’t have to actively look for a job while receiving benefits.





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