Political Correction

Rick Scott's War On The Poor Continues With Drive To Cut Unemployment Benefits

March 09, 2011 1:28 pm ET - by Kate Conway

Gov. Rick Scott

Without coming out and saying it, Gov. Rick Scott (R-FL) has made his disdain for the poor pretty clear. He has urged draconian cuts to Medicaid and other services that sustain Florida's most vulnerable, including disabled people and the elderly. His budget plan not only slashes funding for the Office of Homelessness, but communicates Scott's belief that homeless people hold little worth by eliminating a homeless memorial day that doesn't cost the state any money.

His advisers have also suggested — even amid the current recession — that unemployed people just aren't trying hard enough to find a job. They based this claim on (in addition to their own prejudices) a study from the mid-2000s, the author of which refuted Scott's team's conclusion and criticized them for misrepresenting his report.

But, like his advisers, Scott has pre-drawn conclusions about what benefits unemployed people deserve. In his State of the State speech last night, Scott intimated his intention to cut unemployment insurance benefits because they "cannot be allowed to deter job creation."

SCOTT: Another government program with good intentions and potentially disastrous side effects is our system of unemployment compensation. In times of high employment, the system provides a critical safety net. But its rising costs, which are borne by the very employers who are struggling to stay in business, threaten to create even more job losses. The cost of unemployment insurance cannot be allowed to deter job creation. By working with this legislature we will bring down those costs.

Indeed, with Scott's blessing, Florida legislators are looking at a bill this week that would reduce state unemployment benefits to just 20 weeks, six weeks below the national standard, and also take a sizeable chunk out of federal unemployment benefits available to Floridians. But Scott's — and other Florida Republicans' — hostility toward the unemployed is based on a number of problematic premises.

Scott is basing his contention that unemployment insurance kills jobs on the fact that employers are responsible for paying the tax that funds the unemployment compensation program. Depriving companies of that money, he figures, prevents them from hiring new employees and exacerbates a spiral of increasing unemployment.

But when you look at the amount companies actually have to pay for the tax, that's a pretty ridiculous assertion. According to the Florida Department of Revenue, for 2011, companies only have to pay the unemployment tax on the first $7,000 of each employee's salary, at a rate between 1 percent and 5.4 percent. That means that the most a company could pay annually in unemployment tax per employee is $378 — a pretty minimal number compared to what it costs to employ someone.

And Scott has it backwards — it's most critical to offer hearty unemployment benefits when the economy is down. In addition to being the most effective form of economic stimulus, increasing unemployment benefits during a recession provides a "lifeline" for people desperate to find the jobs that just don't exist.

Unemployment benefits are costing Florida — and the federal government — more now than they would during a better economy. But those costs will go down as the economy gets back on track and there are more jobs to go around, which generous unemployment benefits spur.

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