Alternative to short-term unemployment benefit bill would actually address fundamental problem of long-term unemployment in America
Jan 08 2014
WASHINGTON, D.C.—U.S. Senator John Thune (R-S.D.), Chairman of the Senate Republican Conference, plans to introduce an amendment to S. 1845, the Unemployment Insurance Extension bill, to address long-term unemployment by reducing the cost of hiring and providing relocation resources for long-term unemployed individuals, as well as strengthening and streamlining federal worker training programs. Thune’s amendment is an alternative to extending emergency unemployment compensation for the 13th time since 2008.
“Without addressing the reasons people are seeking additional unemployment benefits, we will be having this same discussion again when this latest emergency, short-term legislation expires,” said Thune. “A historically high number of long-term unemployed individuals continue to suffer in the Obama economy. We need real solutions that will create jobs, better train America’s workforce, and break the cycle of chronic high unemployment without adding to the deficit.”
Of those who are currently unemployed, a historically high 37 percent have been without a job for 27 weeks or longer. That represents over four million men and women who have been most impacted by President Obama’s failed economic policies. Pre-recession levels of long-term unemployed generally varied from one million to two million individuals.
Thune’s amendment would:
1) Exempt long-term unemployed individuals from the Affordable Care Act’s mandate for certain businesses to provide health insurance or pay a fine for each uninsured employee. If an employer hires a long-term unemployed individual, that worker is permanently exempt from the Affordable Care Act full-time employee count for as long as he/she is employed by that employer. Under the Affordable Care Act, businesses with 50 or more employees must provide government-approved health insurance or pay a fine of up to $3,000 per employee.
2) Enact a six-month employer-side payroll tax holiday for each long-term unemployed individual hired. Each employer is responsible for a 6.2 percent payroll tax for each worker. For an employee hired with a $40,000 salary, that represents a $1,240 incentive to hire a long-term unemployed individual, which will help break the cycle of unemployment for those four million Americans who have been out of work for 27 weeks or longer.
3) Provide a one-time, low-interest loan up to $10,000 for a long-term unemployed individual to relocate more than 50 miles away to start a new job or to relocate to a new state or metropolitan area with an unemployment rate that is at least two percentage points less than the individual’s current state or metropolitan area. These loans must be repaid with interest within 10 years. However, no repayments would be required for one year, and if the job is eliminated through no fault of the employee, the loan may be forgiven. Part of a dynamic, mobile workforce is ensuring that those who have been out of work the longest have the resources to relocate for better job opportunities.
4) Streamline and improve job training by including the House-passed SKILLS Act (H.R. 803) which would consolidate 35 federal employment and training programs and create a Workforce Investment Fund to serve as a single source of support for employers, workers, and job seekers at the state level. There are over 50 federal worker training programs across nine federal bureaucracies. Many are redundant and most have not been evaluated for efficacy. Streamlining these programs and empowering state governors to better manage worker training initiatives will benefit employers and prospective employees alike and will particularly help those who have been unemployed the longest.
The payroll tax holiday and the relocation assistance in the amendment would expire two years after enactment or one month after the total number of long-term unemployed drops below two million. The provisions would be offset by lowering the 2015 non-defense discretionary spending caps by $10 billion to $483 billion, which would be a reinstatement of the non-defense caps for 2015 under the Budget Control Act.