Testimony at Hearing on LD 1725 An Act to Strengthen the Unemployment Insurance Laws and Reduce Unemployment Fraud

As we are all too intimately aware, Maine has a jobs deficit. Approximately 48,700 Mainers are unemployed.1 In 2011, we lost approximately 7,200 jobs.2 Our top priority must be to put these Mainers back to work in jobs that pay quality wages. Doing so will help generate economic activity, helping speed recovery and create additional jobs.

There are different policy options that can be adopted to help achieve this commonly shared goal, but one thing policymakers should do is reject LD 1725. We should be strengthening our unemployment benefit system, not weakening it.

LD 1725 would make it harder for unemployed workers to find a job. By reducing the time unemployed workers have to find employment equivalent to their prior job and by eliminating childcare and transportation emergencies from the definition of “good cause” for missing a mandatory appointment for “reemployment eligibility assessment services,” we are forcing unemployed workers into an impossible situation. This is the wrong approach.

Rather, we need to maintain our commitment to the unemployment benefit system. A strong unemployment benefit system has a positive impact on our economy. In a 2009 report, the Maine Department of Labor (MDOL) estimated that over a one year period, unemployed workers received $235 million in unemployment insurance benefits.3 As MDOL noted, these “benefit payments are approximately equal to the third largest private sector payroll in the State of Maine. Unemployment insurance beneficiaries rely on these payments to cover critical needs including housing, food, utilities, and transportation.” Because of the ripple effect, the unemployment benefits in that year period supported 3,200 jobs and $88 million in earnings, as well as contributed $178 million to Maine’s gross state product.

Mark Zandi of Moody’s Analytics has also noted the importance of unemployment benefits. According to Zandi, extending unemployment insurance benefits has one of the most positive stimulative impacts on the economy: every $1 that is spent on such an extension generates $1.52 in economic activity.4 

Simply stated, the unemployment benefit system is a life-saver for the individual unemployed worker, his/her dependents and our economy.

We all share the goal of creating good-paying, high-quality jobs. We urge this Committee to keep its focus on that issue, not on weakening the unemployment system and making it harder for our unemployed neighbors, family, and friends to find a job.

For these reasons, MECEP respectfully urges this Committee to vote ought not to pass on LD 1725. 

 1 http://www.maine.gov/labor/cwri/laus.html.

2 http://www.maine.gov/labor/cwri/ces.html.

3 The Economic Benefits of Unemployment Insurance, http://www.maine.gov/labor/cwri/publications/pdf/EconomicBenefitsUnemploymentInsurance.pdf.

4 An Analysis of the Obama Jobs, Plan, http://www.economy.com/dismal/article_free.asp?cid=224641. 

Dan Coyne, MECEP Legislative Director testifying before the Joint Standing Committee on Labor, Commerce, Research and Economic Development.