Unemployment insurance was commenced in 1935 as a bridge between jobs, but this recession seems to be testing the limits of the system and revealing some inherent cracks.
First, not all states run their unemployment programs the same or use the same eligibility standards. The result of this disparity nationwide is that some 37 percent of those laid off fail to qualify for unemployment insurance.
This hits the lowest paid the hardest since they are twice as likely to be laid off while only one third of them ends up receiving unemployment checks.
Problems with the system began in 1982 when the federal government started demanding interest payments on funds borrowed to cover state unemployment insurance needs. In 1986, unemployment income started being taxed while states were suddenly required to eliminate unemployment payments from those receiving pensions or Social Security even though they otherwise qualified.
Curiously, even though the working world is now computerized, the unemployment system still goes by pre-computer standards and doesn't recognize a worker's last quarter of earnings. So, for those laid off in December 2008, no wages from Oct. 1 on counted in the computation.
Say you were a recent college graduate who started working in June 2008. If you were laid off in December, only the wages and work weeks from June through September would count. This would disqualify you in many states.
Fear not as the Obamites have a handy piece of legislation to reintroduce called the Unemployment Insurance Modernization Act. This act never made it out of the Senate the first time, even though Barack Obama was a sponsor, but chances are now good for its approval.
If enacted, the law would provide states with $7 billion to cover another 500,000 workers (works out to $14,000 per). An additional $500 million would be passed along to cover administrative expenses.
I'm not sure how this act modernizes unemployment insurance, but maybe there's more language in there to patch up those cracks. Otherwise, it's just a one-time payment.
Tuesday, January 20, 2009
Monday, January 19, 2009
USCIS a Paper-Jammed Nightmare, Soon to Be Our Big Brother Thanks to a Bushian Bailout
The U.S. Citizenship and Immigration Services (USCIS) branch of the Department of Homeland Security (DHS) is a $2.6-billion-a-year agency. It is also the paper-jammed and -backlogged agency formerly known as the INS (Immigration and Naturalization Service).
Ask anybody who's dealt with the agency in either incarnation and you'll hear horror stories of standing in blocks-long lines before dawn and spending the whole day waiting for your name to be called. Then a year or two later, you might hear something--if you're lucky.
Someone caught on to the nightmare known as the INS in 1999 and began a modernization process, but they forgot to fund it. Then came 9/11, then the merger into DHS, and then more lack of funds.
Finally, late in 2008 IBM was chosen to take the whole process online in a $500-million, long-overdue project. Considering that it costs the USCIS $100 million a year just to ship and store the huge files it creates for each immigrant, it seems that they coulda and shoulda found the $500 million many long years ago. In five years of operation or so, the computerization will pay for itself.
The goal is to process each applicant in six months' time, down from the 18 months to three years that it typically takes, using electronic applications and database filing.
The new system will allow government agencies, from the Border Patrol to the FBI to the Labor Department, to access immigration records faster and more accurately. In combination with initiatives to link digital fingerprint scans to unique identification numbers, it would create a lifelong digital record for applicants. It also would eliminate the need for time- and labor-intensive filing and refiling of paper forms, which are stored at 200 locations in 70 million manila file folders. (Big Brother has finally arrived!)
To its credit, the USCIS did manage to put its appointments system online a few years back (for another cool $500 mil), and those lines that snaked around several city blocks have now been reduced. Queues still exist, but people show up at appointed times rather than lining up for a limited number of seats each morning. That part is now more manageable, but the processing time is still far too lengthy.
The whole system is so dysfunctional that immigrants who get tired of the wait (or whose documents are simply lost or misplaced, rendering them a non-person) can turn to the court of last resort called (funnily) OIL, Office of Immigrant Litigation, which employs 250 lawyers and costs the government another $20 or more million a year to operate.
Ask anybody who's dealt with the agency in either incarnation and you'll hear horror stories of standing in blocks-long lines before dawn and spending the whole day waiting for your name to be called. Then a year or two later, you might hear something--if you're lucky.
Someone caught on to the nightmare known as the INS in 1999 and began a modernization process, but they forgot to fund it. Then came 9/11, then the merger into DHS, and then more lack of funds.
Finally, late in 2008 IBM was chosen to take the whole process online in a $500-million, long-overdue project. Considering that it costs the USCIS $100 million a year just to ship and store the huge files it creates for each immigrant, it seems that they coulda and shoulda found the $500 million many long years ago. In five years of operation or so, the computerization will pay for itself.
The goal is to process each applicant in six months' time, down from the 18 months to three years that it typically takes, using electronic applications and database filing.
The new system will allow government agencies, from the Border Patrol to the FBI to the Labor Department, to access immigration records faster and more accurately. In combination with initiatives to link digital fingerprint scans to unique identification numbers, it would create a lifelong digital record for applicants. It also would eliminate the need for time- and labor-intensive filing and refiling of paper forms, which are stored at 200 locations in 70 million manila file folders. (Big Brother has finally arrived!)
To its credit, the USCIS did manage to put its appointments system online a few years back (for another cool $500 mil), and those lines that snaked around several city blocks have now been reduced. Queues still exist, but people show up at appointed times rather than lining up for a limited number of seats each morning. That part is now more manageable, but the processing time is still far too lengthy.
The whole system is so dysfunctional that immigrants who get tired of the wait (or whose documents are simply lost or misplaced, rendering them a non-person) can turn to the court of last resort called (funnily) OIL, Office of Immigrant Litigation, which employs 250 lawyers and costs the government another $20 or more million a year to operate.
Friday, January 16, 2009
A Compassionate People We Ain't, Maybe...
Or it could be that the spirit of Howard Jarvis (California's infamous Proposition 13 tax measure author) lives on in most Americans.
I came across a great survey done this past October about health care reform in the U.S., conducted by Deloitte LLC, which showed that only 25 percent of the public favors higher taxes to provide health insurance for the uninsured while 43 percent are outright opposed. The rest are labeled "mixed" or "lukewarm."
The survey also found that 63 percent oppose an individual mandate forcing all people to have health insurance either through work or on their own, while 53 percent favor an employer mandate. Finally (there's more but you can hit the link above to read it), two out of three said health care would be a prime factor in their presidential vote.
(Two-thirds also opposed evidence-based medicine, which means they didn't understand the concept or they saw right through it and realized it's just a code term for rationing. I hope the latter is the case.)
Reading through the results, I concluded (but I had this opinion before reading the survey, to be honest) that the American public still believes that somehow Obama et al. can create a health care system that is free while offering freedom of choice and quick access.
If pipes can dream, then that's what they'll get, but show me that pipe dreaming first.
I came across a great survey done this past October about health care reform in the U.S., conducted by Deloitte LLC, which showed that only 25 percent of the public favors higher taxes to provide health insurance for the uninsured while 43 percent are outright opposed. The rest are labeled "mixed" or "lukewarm."
The survey also found that 63 percent oppose an individual mandate forcing all people to have health insurance either through work or on their own, while 53 percent favor an employer mandate. Finally (there's more but you can hit the link above to read it), two out of three said health care would be a prime factor in their presidential vote.
(Two-thirds also opposed evidence-based medicine, which means they didn't understand the concept or they saw right through it and realized it's just a code term for rationing. I hope the latter is the case.)
Reading through the results, I concluded (but I had this opinion before reading the survey, to be honest) that the American public still believes that somehow Obama et al. can create a health care system that is free while offering freedom of choice and quick access.
If pipes can dream, then that's what they'll get, but show me that pipe dreaming first.
Thursday, January 15, 2009
Law of Unintended Consequences: Fair Pay Acts
I just read an interesting analysis of--and commentary on--the two fair pay laws now sailing through Congress: The Paycheck Fairness Act and the Lilly Ledbetter Fair Pay Act.
Maggie Thurber on her ThurbersThoughts blog, after discussing and analyzing the two measures, concludes that they may well put women at a competitive disadvantage because employers might conclude that it's legally safer just to hire men.
Someone then posted a comment that, if employers just want to hire women to pay them less than men, then why hire men in the first place? Just hire women. S/he's got a point--there's no law enabling men to sue if women are being paid more for the same work.
Anyway, Ms. Thurber is a radio talk show host, I believe, as well as being a attorney by education. I thought she did an excellent job in deconstructing the consequences, intended and unintended, of these two laws, which in my opinion will end up gumming up working conditions and landing employers in court much too frequently in battles Congress has set them up to lose.
Maggie Thurber on her ThurbersThoughts blog, after discussing and analyzing the two measures, concludes that they may well put women at a competitive disadvantage because employers might conclude that it's legally safer just to hire men.
Someone then posted a comment that, if employers just want to hire women to pay them less than men, then why hire men in the first place? Just hire women. S/he's got a point--there's no law enabling men to sue if women are being paid more for the same work.
Anyway, Ms. Thurber is a radio talk show host, I believe, as well as being a attorney by education. I thought she did an excellent job in deconstructing the consequences, intended and unintended, of these two laws, which in my opinion will end up gumming up working conditions and landing employers in court much too frequently in battles Congress has set them up to lose.
Wednesday, January 14, 2009
Unions, Smunions--What, Me Worry?
For all the celestial disturbance over the proposed Employee Free Choice Act (EFCA), you wouldn't know it from a poll I just discovered at the Manpower Employment Blawg.
The blog posted this question:
What is the #1 most frightening employment law issue you’re facing right now?
And got these results:
1. Terminations (26%)
2. Discrimination (13%)
3. Medical issues (10%)
4. Harassment (9%)
5. (Tie) Wage and hour (8%) and Benefits (8%)
7. Hiring (7%)
8. RIFs (6%)
9. Unions (3%)
So, unions are at the bottom of the list, are they? That being the case (in a very unscientific survey), why all the hubbub over EFCA?
The blog posted this question:
What is the #1 most frightening employment law issue you’re facing right now?
And got these results:
1. Terminations (26%)
2. Discrimination (13%)
3. Medical issues (10%)
4. Harassment (9%)
5. (Tie) Wage and hour (8%) and Benefits (8%)
7. Hiring (7%)
8. RIFs (6%)
9. Unions (3%)
So, unions are at the bottom of the list, are they? That being the case (in a very unscientific survey), why all the hubbub over EFCA?
Tuesday, January 13, 2009
Lilly Ledbetter Triumphs Over Congress
A week ago I wrote that the Lilly Ledbetter Fair Pay Act was being put on fast track for passage by the 111th Congress. With a snap of their fingers (actually, pushing their "yes" buttons), members of Congress did just that and sent Lilly over to the Senate, where Harry Reid and other leaders are confident of having the necessary votes to choke off a Republican filibuster.
(To recount, the Fair Pay Act reverses a Supreme Court decision regarding when the statute of limitations begins on pay discrimination complaints. The court said it begins once the pay-discrimination decision is made; the new law says it begins anew each time a paycheck is issued.)
Meanwhile, this opening salvo in the pro-employee, pro-union, pro-trial-lawyer assault on Bush's eight pro-business years is already drawing criticism and producing warnings.
So far, I haven't heard the word "Armageddon" used in connection with the Fair Pay Act (as it was used toward the Employee Free Choice Act), but here's one dire warning from Forbes.com:
Libertarian Richard A. Epstein calls the passage "Democratic Death Wish On Labor Relations."
Interesting stuff. Epstein is a libertarian and a professor of law at the University of Chicago. He predicts that companies will now have to spend more time preparing for legal action and more time defending themselves in court in cases involving lots of "stale evidence."
He writes that "every dollar that is spent in litigating the past is one less dollar for hiring new workers."
Everytime a new labor law comes up for a vote, just remember who contributed the most to the Democrats and Barack Obama in the November 2008 election--unions and trial lawyers. Then you can see who's really going to benefit from any laws or economic stimulus packages coming out of D.C.
(To recount, the Fair Pay Act reverses a Supreme Court decision regarding when the statute of limitations begins on pay discrimination complaints. The court said it begins once the pay-discrimination decision is made; the new law says it begins anew each time a paycheck is issued.)
Meanwhile, this opening salvo in the pro-employee, pro-union, pro-trial-lawyer assault on Bush's eight pro-business years is already drawing criticism and producing warnings.
So far, I haven't heard the word "Armageddon" used in connection with the Fair Pay Act (as it was used toward the Employee Free Choice Act), but here's one dire warning from Forbes.com:
Libertarian Richard A. Epstein calls the passage "Democratic Death Wish On Labor Relations."
Interesting stuff. Epstein is a libertarian and a professor of law at the University of Chicago. He predicts that companies will now have to spend more time preparing for legal action and more time defending themselves in court in cases involving lots of "stale evidence."
He writes that "every dollar that is spent in litigating the past is one less dollar for hiring new workers."
Everytime a new labor law comes up for a vote, just remember who contributed the most to the Democrats and Barack Obama in the November 2008 election--unions and trial lawyers. Then you can see who's really going to benefit from any laws or economic stimulus packages coming out of D.C.
Monday, January 12, 2009
Warning About WARN for Employers
The WARN Act (Worker Adjustment and Retraining Notification Act) specifies that 60 days' notice must be given in firms with more than 100 full-time employees when large-scale layoffs are going to take place. The act kicks in when 50 employees at one location are laid off within a 30-day period, or when 33 percent of the workfoce is laid off, or when 500 employees are laid off (regardless of the percentage of the workforce).
However--and there are a lot of howevers in WARN--the window extends to 90 days when the layoffs are staggered but reach those same thresholds in combination. ("Caught you trying to cheat!" is the emphasis here.)
Here's another however: WARN defines full-time employees as those who have averaged at least 20 hours per week in six of the past 12 months, or another definition--if the entire workforce averages 4,000 hours per week excluding overtime.
I bring this up for a couple of reasons. One is that the incoming Obama administration has been loud about extending the 60-day notification to 90 days. The other is that just this week one union at Republic Windows and Doors in Chicago (remember the showdown over WARN during that factory shutdown?) filed suit to force the owners to return equipment to the Chicago site that was reportedly relocated before closing.
Now, here's the interesting part: The union alleges that Republic's owners ferreted away the machinery in the middle of the night to a location in Indiana, where they intended to set up new, non-union operations, and then told the workers that the Chicago firm was shutting down because Bank of America wouldn't extend them a line of credit.
If this is true, it brings to light a fascinating new wrinkle and shows that Republic did indeed scheme to avoid WARN.
In the end, to avoid a public relations nightmare, BofA forked over about $1.5 million to Republic, and the workers received 60 days of pay and benefits.
Which brings up the final point: There's no way an employer would want dozens of laid-off workers sitting around the workplace for 60 days while knowing they're getting the axe. It's doubtful they'd do much constructive work, and it's likely that pilferage and sabotage would take place. Pay them 60 days' worth and see them off.
So, if the Obama team manages to up the WARN stakes, many companies will face paying three months of wages and benefits just to downsize in an effort to survive in tough economic times.
Better to gid rid of them now! LOL Just kidding, of course.
However--and there are a lot of howevers in WARN--the window extends to 90 days when the layoffs are staggered but reach those same thresholds in combination. ("Caught you trying to cheat!" is the emphasis here.)
Here's another however: WARN defines full-time employees as those who have averaged at least 20 hours per week in six of the past 12 months, or another definition--if the entire workforce averages 4,000 hours per week excluding overtime.
I bring this up for a couple of reasons. One is that the incoming Obama administration has been loud about extending the 60-day notification to 90 days. The other is that just this week one union at Republic Windows and Doors in Chicago (remember the showdown over WARN during that factory shutdown?) filed suit to force the owners to return equipment to the Chicago site that was reportedly relocated before closing.
Now, here's the interesting part: The union alleges that Republic's owners ferreted away the machinery in the middle of the night to a location in Indiana, where they intended to set up new, non-union operations, and then told the workers that the Chicago firm was shutting down because Bank of America wouldn't extend them a line of credit.
If this is true, it brings to light a fascinating new wrinkle and shows that Republic did indeed scheme to avoid WARN.
In the end, to avoid a public relations nightmare, BofA forked over about $1.5 million to Republic, and the workers received 60 days of pay and benefits.
Which brings up the final point: There's no way an employer would want dozens of laid-off workers sitting around the workplace for 60 days while knowing they're getting the axe. It's doubtful they'd do much constructive work, and it's likely that pilferage and sabotage would take place. Pay them 60 days' worth and see them off.
So, if the Obama team manages to up the WARN stakes, many companies will face paying three months of wages and benefits just to downsize in an effort to survive in tough economic times.
Better to gid rid of them now! LOL Just kidding, of course.
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