Unemployment in Florida

While being unemployed is always tough, it is about to get tougher in my state of Florida. While most states provide 26 weeks of full unemployment benefits for those fired without fault, Florida will reduce that to 23 weeks. There will also be sliding scale of benefits based on the unemployment rate in the state. If unemployment reaches 5%, then the full benefits run out after 12 weeks.The main purpose of the bill is, it appears, is to reduce the unemployment tax on businesses.

Doug Holder, the House Republican who sponsored the bill, argued that the bill would not be harmful to the unemployed. His reasoning is that since the average unemployed person finds a job in 17.7 weeks, the unemployed will have a “cushion” between 17.7 and 23 weeks.

While this has a certain appeal, it is important to take into account the hazards of reasoning from averages. While averages can be useful, they can also be rather misleading-as the old joke about the average depth of a river attests. Knowing that a river has an average depth of three feet, for example, does not entail that a person can simply wade across it.

Likewise, knowing that the average unemployment length is 17.7 weeks does not automatically entail that most people will find jobs at the 17.7 week mark. Assuming that the number is accurate and that it is a mean (there are numerous types of averages), there is still a reasonable concern that the benefits could run out before a significant number of people are able to find a job (just as a person wading across a river with an average depth of three feet might find herself swimming).

The fact that the benefits slide with the employment rate is also a point of concern. After all, even if the unemployment rate is 5%, this does not entail that it will be considerably easier to find a job for the 5% who are unemployed.

In addition to reducing the duration of benefits, the bill is also aimed at making it easier for businesses to challenge claims from workers they have fired and also making it harder for the unemployed by imposing stricter job search requirements on the jobless.

While it is reasonable to ensure that the jobless do not exploit the system, it is equally important to ensure that businesses do not exploit the system. After all, if businesses can save money by seeing to it that people they fire do not receive unemployment, they have an incentive to make this happen. By making it easier to do this, this bill would certainly seem to encourage such behavior.

For those who say that businesses would not do such a thing, the argument for both the easier (for business) and the stricter standards (for the unemployed) is that there are jobless people who seek to exploit the system. To assume that only the jobless are exploiters and the business people are far more virtuous would certainly be a failure to understand reality. As such, if protection is needed against the misdeeds of the jobless, it would also seem to be needed against the misdeeds of business people.

It is a common, and unjustified, assumption that people are eager to remain jobless so as to milk the system. While there are no doubt some people who do this, the overwhelming majority of people want to work. For example, when McDonald’s was hiring recently, the turnout for even the lower-end jobs was overwhelming. There are, of course, some people who are happy to rake in public money while doing little good in return. These people are, of course, politicians.

As noted above, the main purpose of the bill seems to be to reduce the unemployment tax.  This is presumably calculated to encourage business. Holder makes this clear: “The most important thing for us in Florida to do is to send a message to the business community and let them know we’re open for business.” Clearly this is more important than ensuring that the unemployed are not abandoned before they can find employment.

To be fair to Holder and folks in business, if the cutting of benefits leads to a higher overall employment rate that offsets the lost benefits, then this would be a good idea. It is clearly preferable to have someone working rather than on the public dole. That said, it is reasonable to be concerned that the tax cut will not have enough impact on the unemployment rate. After all, the economy has been rather good for big business and yet this has had little impact on unemployment. It would thus be hardly surprising if businesses merely pocketed their tax savings rather than using it to create new jobs.

While the details might be devilish to work out, I would suggest that business get an unemployment tax reduction based on their hiring and firing rates. Businesses that create and retain jobs should be rewarded for this by having to pay less unemployment tax. After all, by creating and keeping jobs they are keeping people off the dole and also creating taxable income. Businesses that cut jobs should, in contrast, pay more unemployment tax. However, I suspect that the politicians who are very friendly with business folks would not favor a law that actually linked employment to tax cuts. After all, the agenda of Rick Scott and his ilk seem to be to transfer as much wealth as possible from those who have little to those who have the most.

If I did not have a meaningful job, I would seriously consider trying my hand at politics.