Businesses say unemployment system too generous
June 12, 2003
Olympia, WA - Here's what all the fighting's about:
Prodded by business -- particularly Boeing -- Washington lawmakers are shrinking the state's unemployment benefits system, which critics describe as one of the most generous in the country.
The system is designed to help workers who lose their jobs through no fault of their own. No tax dollars are involved; the system is entirely financed by payroll taxes paid by employers. It is administered by the state's Employment Security Department.
In general, workers who have worked 680 hours in a year are eligible for some benefits. Payments are based on how much a worker was earning before he or she lost the job. The maximum weekly payment is currently $496, and payments last up to 30 weeks. The minimum is $107 a week.
Many businesses say they can't afford the plan, which one lawmaker on Tuesday referred to as a "Cadillac." In Boeing's case, the company pays $772 per year per employee in Washington, the highest rate of any of the 26 states in which the company does business. Boeing pays $482 in Oregon, $378 in California, and $105 in Kansas.
Most lawmakers say that Washington's system is too costly, and that costs and benefits should be trimmed. But how to do that was the question.
Many seasonal workers -- laborers and agricultural workers, for example -- rely on the state's unemployment system to feed themselves and their families during the months when there is no work. Democrats tried hard to protect such seasonal workers from large benefit cuts.
The business plan calculates jobless benefits based on average earnings over the past four quarters. The current system uses a worker's two most lucrative quarters over the past 12 months.
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