PA State Legislature to Take One of Largest Loans in State History to Pay Off Unemployment Compensation Fund Debt

This month, Pennsylvania House lawmakers approved a bill that will allow the state to borrow money to pay off the $3.9 billion it owes the federal government in jobless benefits. The state has been in debt since 2008 when businesses borrowed money to compensate laid-off workers during the recession. The bill authorizes one of the largest single-debt issuances in Pennsylvania history, but supporters hope that saving employers’ money will lead to the creation of more jobs. Part of the problem is due to structural inefficiencies-the tax structure that underwrites employee compensation trust fund has not been increased by state lawmakers since the 1980s, even though the workers’ salaries that determine the amount of benefits have risen steadily. Rather than addressing these issues, however, the administration has chosen to focus on saving money at the expense of workers. Packaged in this bill are “money-saving” provisions that predictably shave away at workers’ rights while serving big businesses. One such provision limits eligibility for jobless benefits by eliminating eligibility altogether for people, such as seasonal workers, who make a majority of their annual income over several months. As is, an employee must earn 20% of their base-year wages outside their highest-earning quarter. The Corbett administration is lobbying to dictate that 49.5% of base-year wages must be earned outside of one’s highest-earning quarter. Why? Because the change would mean that over the course of one year, 48,000 fewer people would be eligible to receive benefits. Every day, political decisions are being made that affect all of us. It is our responsibility to get educated and get involved!



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