Alaska editorial: Unemployment pay rates should be increased

Posted: Thursday, March 01, 2007

This editorial appeared in the Homer Tribune:

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A recent study by the state's economic number crunchers focused on Alaska's unemployment benefits, and revealed some interesting figures that ought to be examined by state lawmakers.

If you are unemployed in Alaska, and qualify for the maximum unemployment benefit, you will receive approximately half of what an unemployed Washington state resident would get.

That fact needs to be corrected before the discrepancy erodes Alaska's work force and its economy.

While more year-round jobs would be an even better solution, the simple fact is that Alaska will always have a seasonal economy, and our economic policies will always need to embrace that fact.

The state itself employs hundreds of seasonal employees who are asked to live a feast-and-famine lifestyle, working only in the summer months. Construction crews, those catering to the huge economic engine of the tourist industry and those in seasonal natural resource jobs face a similar situation, and many use unemployment insurance to span the gap between the seasons.

Alaska's policies make it relatively easy to get unemployment insurance benefits. That, combined with our seasonal economy, results in a state where a high percentage of those unemployed receive the benefits. It is, therefore, critically important that this mainstay of Alaska's economy be watched carefully.

Currently, if you make more than $26,500 a year, you will qualify for a maximum benefit of $248 a week. That's $1,000 a month and according to the study, far below the benchmarks set by the federal government for unemployment insurance.

In fact, while Alaska's workers use unemployment insurance more than most states, the benefit amount ranks Alaska at the bottom of the nation based on the benefit's comparison to the Alaska worker's average salary.

Translation: In a state where salaries are generally high, unemployment benefits are far too low.

Unemployment insurance was set up during a time when economies were crumbling nationwide. Like any insurance policy, it is meant to be a stabilizer between the good times and the bad, to keep economies, and families from spiraling into a crisis during lean times.

In Alaska, however, for better or worse, unemployment insurance is a necessary piece of the puzzle. Without adequate benefits, can we expect workers to come back year after year to provide the necessary services in our parks and shops and build our roads and homes each summer?

It has been a decade since the state has increased the maximum benefit for unemployment insurance. During that time, inflation has continued to grow, along with the price of milk, gasoline, and mortgage payments.

Perhaps the relatively easy qualification standards need to be part of the answer to the puzzle of how to pay for the increase. Workers can qualify for a minimum benefit of $44 after earning only $1,000. That's 18 days working a minimum wage job, and it's hard to imagine someone who sincerely wants to work can't find more than 18 days worth of work. Then again, $44 a week barely covers a week's worth of Ramen Noodles, so the incentive to find something else surely still exists at that point.

Workers are also able to qualify for benefits if they quit their job (after a six-week waiting period). Other states have different policies about such situations, and perhaps Alaska should, too.

But the bottom line is that one way or another, the state needs to realign its unemployment rates if it wants to continue to retain its large segment of seasonal workers. The last time the rates were increased, the average salary per week in the state was a full $200 less than it is today.

While stigmas from the past surrounding accepting any sort of government assistance may make it easier for state lawmakers to ignore the needs of the state's unemployed - some 50,000 people a year and close to one-fifth of the work force - the simple fact is that in Alaska, unemployment insurance is a key part of the economic puzzle.

And while parallels with other states are not entirely straight lines, the benefits must be enough for families to hang in there during the lean times.

That's why unemployment insurance was created, and it serves a necessary purpose in all our lives, whether we are seasonally employed or not. It's time to bring the unemployment benefit rates back in line with the national standards.



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