Alaska stands at a crossroad.
One direction leads to statewide prosperity and a robust economy, while another direction leads a skilled workforce heading south to earn a living. The 1,000-plus members of Laborers’ Local 942 and countless other hard-working Alaskans could soon be faced with such a decision. That’s why the Legislature should support updating the unemployment benefit for Alaskans. Unemployment benefits are a win-win-win—good for Alaskan employees, good for Alaskan employers and good for the economy.
This year, as the legislative session comes to an end, unemployment benefits are being treated as a bargaining chip that works against the middle class. HB 142, as it was introduced, increased unemployment insurance benefits from $370 a week to $510 a week. The unemployment benefit is available for eligible workers who become unemployed through no fault of their own, work less than full-time, and/or meet other eligibility requirements. The last time this wage was increased was in 2009, nearly 10 years ago. As statute is currently written, all wages above $42,000 are not calculated in the Maximum Weekly Benefit Amount, leaving the reimbursement as a percentage of per capita income the worst in the nation.
In Alaska, workers who are unemployed and qualify for the benefit can receive up to 36 percent of the average weekly wage rate of $1,020, or $370. This benefit is available based on a shared contribution schedule for both employees and employers, and while the benefit is not unique to Alaska, only two other states require an employee contribution at all. In fact, unemployment benefits to Alaskans are in the lower third of all states, despite having one of the highest costs of living.
Although the construction industry has suffered a 25 percent loss of jobs in the last three years, inflation weighs heavy on the workforce that builds Alaska. With the seasonal character of our industry, employees understand their contribution as insurance for when they are, often unpredictably, not working. Because of the cyclical nature of the industry, and the ability to be called back to work on short notice, construction employees often spend their time in training, gaining certificates to advance their trade.
Employees in Alaska currently pay 27 percent of the costs for unemployment insurance, while employers pay 73 percent. As a comparison, the other two states that require an employee contribution for unemployment insurance only pay a fraction of that. As I write, some legislators whose attention is pointed more towards industry than working Alaskans are contemplating a decrease to the proposed benefit. The original bill proposes the weekly benefit increase to $510, barely enough to make up for the last 10 years of inflation, and barely enough for meager living expenses in our state. Raising the employee’s share of the unemployment insurance costs is a distraction from the simple facts: Unemployment benefits strengthen the economy and allow Alaskans to stay in their communities.
With a shrinking capital budget and increasing non-resident hire within the oil industry, the current proposed reapportionment of the burden of funding unemployment insurance turns us away from the path to prosperity for the individual worker. Just this year, our members were asked to bear the burden of healthcare increases, borne on the back of reduced wages with no increase to their pension security. They cannot afford another dime to compensate for industry as a disproportionate funding source.
HB 142 is supported by construction contractors who fear losing Alaskans to jobs Outside, and understand that keeping good workers in the state is paramount to their success. When industry struggles to find Alaska competitive, the Legislature listens. Alaskans expect the same. Asking workers to compensate for industries making billions from our natural resources using public money is ludicrous. Since the 1970s, workers’ productivity has far outpaced both compensation and inflation. It’s time the Legislature stands with hard-working Alaskans to provide unemployment benefits at a standard comparable to the rest of the country for a state that far surpasses its dependence on the working class.
For decades, industry has threatened to leave the state because it’s too costly to do business here. For our workers, this isn’t a threat. It’s reality. Our economy is our people and it’s time to compensate this workforce fairly to keep Alaska moving forward.
• Scott Eickholt has spent nearly 30 years in the workforce and is currently the Business Manager for Laborers’ Local 942 in Fairbanks.
