Monthly Archives: August 2015

North Carolina Unemployment Debt

Unemployment

When the crisis hit in 2008 a ton of people lost their jobs and went on unemployment benefits.  During that time, the Feds loaned money to states to extend unemployment eligibility and to increase the amount of benefit.

Well, until that money is paid off, North Carolina businesses have been forced to pay higher unemployment taxes in order to service that debt.  Of course, this makes it tougher on folks providing jobs.  In response to this, North Carolina refused to continue extended benefits and instead work to pay off that debt.

And now we have:

— North Carolina no longer owes $2.75 billion it borrowed from the federal government pay first-time unemployment claims during the recent recession, action that will translate into lower taxes for employers.

“This is not just about repaying debt we owe to the federal government. This is about creating jobs,” Gov. Pat McCrory told a gathering of lawmakers, business leaders and cabinet officials Tuesday in the old House chambers at the historic State Capitol.

Businesses pay two basic types of unemployment taxes – federal and state. The federal, or FUTA, taxes state employers will pay on Jan. 1, 2016, will be about $280 million less than they were this year. State unemployment taxes, or SUTA, are going to remain steady for roughly another year until the state’s unemployment reserve fund tops $1 billion, then they will drop as well.

All told, North Carolina employers can figure to pay $700 million less a year in unemployment taxes starting in 2017 than they paid in 2014.

Bernie Sanders And Economics

Bernie Sanders

There is no doubt that Bernie Sanders is not alone when it comes to inconsistencies in his world view.  But he’s such an interesting character, at least he honestly identifies as socialist, that it’s impossible not to find humor in his policies.

Bernie feels that certain economic laws apply to conditions while believing, seemingly randomly, that others don’t.

For example, Sanders feels that open trade agreements move work over seas; the idea being that corporations will flow where the less expensive labor exists.  A concept that I whole heatedly agree with – YEAH Bernie!  On the other hand Mr. Sanders does NOT feel that raising the minimum wage will have much the same impact on marginally skilled workers – BOO Bernie!

All this came to mind when I discovered Mr. Sanders’ objection to open borders:

“What they are talking about is completely opening up the border,” Sanders responded. “That was the question. Should we have a completely open border so that anyone can come in the United States of America? If that were to happen, which I strongly disagree with, there is no question in my mind that that would substantially lower wages in this country.”

Good for Bernie.  He’s right, of course, that allowing unskilled workers in from our neighbors to the south to bid on and compete for jobs will reduce the rate at which employers will need to pay.  Further, it will erode the most marginal, the less educated and least skilled, workers.  So yeah, he’s right – and I’m surprised.

Further, Mr. Sanders continues and is able to point out exactly who those folks might be:

“When you have 36-percent of Hispanic kids in this country who can’t find jobs and you bring a lot of unskilled workers in the country what do you think happens to that 36-percent of kids of today who are unemployed? 51% of African-American kids [are unemployed],” Sanders said.

“I frankly do not believe we should be bringing in significant numbers of unskilled workers to compete with those kids,” Sanders made clear.

In addition to pointing out that Bernie is right, I would also like to point out two other facts.  One – Bernie is supporting an unpopular position because he cares about the folks most in need.  He gets the fact that it won’t be high tech jobs impacted.  Two – Bernie is supporting a position because he CARES about the people most likely to be impacted.  This is a very similar situation that conservatives find themselves in when we offer support for lower taxes, reduced government dependency programs and oppose the minimum wage.