By Molly Kivi
On the importance of unemployment insurance–and how an upcoming public hearing could elevate the need for reform, to the benefit of workers and communities statewide.
On July 22nd at 5pm the Commission to Study Unemployment Insurance Trust Fund Solvency will hold a public hearing about the importance of safeguarding Massachusetts workers’ access to unemployment insurance. The Commission is jointly chaired by Senator Pat Jehlen of Second Middlesex district and Representative Josh Cutler of Sixth Plymouth district. You can sign up to speak at the hearing here.
This commission was enacted into law on April 1st, 2021, in response to the Unemployment Tax and Benefit Reform campaign. This worker-led campaign began in March of 2020 to warn lawmakers that the unemployment system was not ready for fiscal and social emergencies such as COVID-19.
Unemployment insurance is an important tool in the labor revolution tool kit, helping to take the sting out of bosses’ threats to fire unruly workers. This is why state and federal governments have been hacking away at funding and access since the first amendment to the Social Security Act in 1939.
Unemployment insurance is designed to protect workers from economic devastation when forces out of their control take their livelihood away. Workers are forced out of their jobs all the time due to unsafe work conditions, job duties and workplace behaviors that are unlawful, as well as layoffs due to economic downturns and in industries that experience cyclical job losses, like the arts and construction.
Despite its importance for safeguarding workers’ livelihoods, the Massachusetts unemployment insurance system has some significant structural flaws. The benefit payments do not factor in purchasing power, so insurance increasingly fails to help workers deal with a rising cost of living. The tax system used to fund the program is also regressive, because the taxable wage base is capped at the first $15,0000 of workers’ income. Furthermore, because employers’ tax rates increase when layoffs occur, smaller businesses end up paying into the system higher rates than large businesses that are better able to weather business cycle fluctuations. Finally, for decades the trust fund that holds the money to distribute benefit payments has not collected enough revenue to comply with the Department of Labor standards,due to a tax break benefiting big business enacted in 1997 costing the state 13 billion dollars.
The effects of an insolvent trust fund ripple throughout the state economy, ultimately hurting the working class the most. The application process places a cumbersome administrative burden on unemployed workers, and restrictions on access often disqualify workers unjustly. The taxes used to pay interest on the loans that Massachusetts takes out to cover its unemployment insurance liability are levied with a regressive impact on small businesses and workers.
Instead of giving tax breaks to big business, Massachusetts needs to create a program that helps workers and communities thrive. The Unemployment Tax and Benefit Reform campaign is calling on the state legislature to stop the big business tax freezes, to tax full wages, to enact a sliding scale benefit calculation, to ease administrative burdens, to abolish the Experience Rating system, and to guarantee that undocumented workers, who pay into the system through payroll taxes, receive the receive benefits they deserve .
These legislative updates would ensure that Massachusetts workers have access to a fair unemployment insurance system. If you have a story about your experience with unemployment insurance, please sign up and share it. In our rigged political system, workers and the unemployed do not have a seat at the table. July 22nd at 5pm is our day to be heard.
Molly Kivi is human. She can be found trail running in the woods or tending to her garden. On paper she is an accountant turned unemployed server, member of Boston DSA Labor Working Group, and Founder of Stone Consultants. Current reading, “The Politics of Experience”.