This post is not going to be pretty.
I’ve been part of two layoffs in the past decade. Admittedly, trying to etch out a supply chain/materials management career in manufacturing in the Northeast part of the United States pretty much sets you up for this sort of rebooting. Ironically, the Philadelphia area used to brag about all of its “manufacturing” activity because of all the big-name pharmaceutical companies that set up shop here. Their arrival made it look like our region was booming with manufacturing career opportunities.
Have you heard about the layoffs in that industry lately? Our area is now getting a whole new wave of unemployed folks coming ashore.
Which brings me to my subject for the day…
On Sunday I read an article with the headline, “Big Changes For Unemployment Benefits.” As a former participant, I was interested to see what “big changes” meant.
Not surprisingly, the length of unemployment benefits provided next year will be rolled back from 99 weeks to 86. Congress did not renew the longer term. More on that in a moment.
Of more surprise value was learning:
1. Severance pay would affect one’s benefits starting next year. If a severance package equates to more than 40% of the average yearly wage in Pennsylvania, weekly benefits will be offset by the amount of severance designated for that week.
2. Pennsylvania is encouraging a “shared work program” for all employers order to prevent mass layoffs. Employers opt to reduce the number of hours for an employee. The employee would then file for benefits for the balance. A common scenario would be if your employer decided to only have you work four days instead of five. At that point, you would file for benefits for the lost day…and get a half-day of pay…while keeping your job.
3. Anyone engaging in any actions “demonstrating” self-employment activity would not get unemployment benefits, even if those attempts failed to yield any profit.
4. There will be a requirement of anyone getting unemployment benefits to prove they are actively looking for work on a weekly basis, working through the state’s CareerLink Service. The criteria has yet to be finalized.
Yesterday, I had a chance to attend my first-ever local Chamber of Commerce event. Congressman Jim Gerlach was the featured speaker.
He spoke for about a half an hour about the many issues facing our country at this time. Needless to say, most of his remarks touched upon economic activity, ways to improve it, how to find or create work, etc. He confirmed what everyone in the room already was thinking…the two parties have no consensus whatsoever on what to do and with a Presidency “at stake” we will all be hard-pressed to see any improvement in the nation’s current overall condition until 2013. Apparently, it is now up to the voters to decide what to do and we’ll have to wait and see.
Anyway, before I go down a bad road and start hammering away at that logic…when the floor was opened for questions I asked one:
“Since everyone is in agreement our economic condition is unlikely to improve for over another year what is the government’s logic in reducing the amount of weeks folks can get unemployment benefits…and why would their severance pay affect and reduce any unemployment benefits?”
A summary of the Congressman’s response:
1. It was felt by most in Washington able-bodied people should be able to find “gainful employment” within the reduced term.
2. He thinks it is very important to confirm anyone getting unemployment benefits is actively looking for work.
3. The reason for #2 is today’s unemployed benefits recipient can become tomorrow’s welfare or public assistance recipient, which only deepens the challenges facing the country.
4. He avoided the severance pay part of my question completely.
Well…here’s my take:
1. Severance pay has been earned by the individual in question. It has been negotiated and agreed upon by both employer and employee based on the person’s experience with the company. There is no way on Earth any of that money should adversely affect unemployment benefits, which if you are lucky come to half of what you earned previously. That severance pay gets you a certain start…on an uncertain future.
2. The paperwork and confusion created by employers going through a rough patch and now laying people off for days here and there will be a nightmare for all to navigate. In some industries, that has always been the case because of the nature of the work (i.e. seasonal). Now, the state is encouraging all companies to do this. They will, but it will have nothing to do with avoiding “mass layoffs.” It will surely be abused as businesses figure out how to maximize profits while retaining workers now making less.
3. I have never understood why a person getting benefits can’t earn money while looking for another job without it being “taken out” of their benefits normally due them. Again, benefits don’t pay your bills. You are already “in the negative.” Why can’t you try to make yourself whole? And this nonsense about people trying self-employment and gaining NO profit being penalized for doing so? Evil.
4. No problem at all with the unemployed demonstrating activity towards finding work. I am not sure how that should best be accomplished at this writing, but I can say I fear the next thing Pennsylvania will do is cut off unemployment benefits to someone for not taking any job. Job searches are time-consuming and you need flexibility to meet people, etc. That is of course, assuming there are any jobs or anyone to meet. Is the Commonwealth headed to the point if you don’t take the minimum wage opening down the street you will lose benefits because you have refused “gainful employment?” There are minimum wage jobs out there. Will folks trying to get unemployment benefits be denied because they refuse to work these jobs?
Look, having been in manufacturing and distribution most of my career I’ll tell you a lot of jobs people are looking for are not coming back. They are gone. Gone for good. Our government has shown no taste for keeping those “job creators” we keep hearing about keeping work in the States. That’s how all this started. The very people some politicians are trying to protect from tax burdens that will supposedly limit job creation already gave the jobs away. I could care less whether they get tax breaks now or not because unless the government gets enough courage to mandate they bring work back here nothing will change.
Nothing will change…except apparently how we treat the unemployed. There’s more activity on that front than trying to rebuild this nation and the unlimited opportunity it allegedly provides to all.