A small part of the president's proposal announced in his September 8th speech was to bring to scale a job training program from Georgia that impacts very few unemployed people. Since it has no real costs associated with it, proposing it was harmless. But, this is one program that the Republicans - particularly Medicare-privatizer Rep. Paul Ryan - really like. Not because it has no costs, but apparently because they think that the unemployed should be forced to work in exchange for their benefits. This is perhaps the inevitable result of proposing to scale up a program like Georgia Works during a proposal that is geared at creating jobs. The president is serious about doing something to help unemployed workers - the Republicans just want use the opportunity to further transfer wealth from working people to the rich. And free labor does make some people very rich. Just not the people doing the work.
So, watch out – the Republicans are going to try to take the president’s proposal and use it to require free labor from the unemployed. To be fair to the program, this is NOT what Georgia Works is about. The program allows unemployment insurance claimants an opportunity to work for a specific period of time without compromising their benefits in order to gain important on-the-job skills. Employers pay nothing into this system as an incentive for letting UI claimants get an experience they would not otherwise be allowed to get (I have argued elsewhere that employers should have to match the UI benefit to participate in a program like this). Georgia Works is a job training program, it is not a job creating program. And it is not for everyone. Many unemployed workers do not need a training program like that to keep their skills fresh or develop new ones. But, for those who do this may be a good program for them.
Ryan makes an analogy between welfare reform and UI. His implication is that persons collecting UI benefits are getting a free ride. I am not going to debate whether that’s a fair characterization of welfare, but it is a complete misunderstanding of what unemployment insurance is. Like the name suggests, UI is an insurance system for wage replacement. Premiums are paid by employers to insure workers against being laid off due to events beyond their control. In turn, laid-off workers receive insurance payments to help support them through what is hopefully a short-term period of unemployment. Employers have always supported the existence of the unemployment system – although from time to time they may have problems with specific aspects of implementation – and the reason for this is that it is not just an insurance system for workers – it is an insurance system for employers. It insures that states maintain the type of stability that businesses need to attract and retain workforces and customers. After all, laid-off workers cannot pay bills without some kind of income support.
But, to be clear, these insurance payments do not make workers whole. Up to the state-mandated cap, unemployed workers only collect 50% of their previous salaries. In the state with the highest cap (Massachusetts), most workers still only collect about 33% of their previous salary. The payments do not come directly from their former employers, but like all insurance programs, they are socialized through the system. Employers' premiums will change depending on the costs they put on the system through laying folks off (or not). Again, like all insurance programs. So, making the unemployed work for their benefits results in (1) workers being underpaid, (2) employers getting free labor which is charged back to other employers, and (3) forcing workers to submit to the whims of their new "employers" because their benefits will be tied to them working there.
Unemployed workers need paying jobs, not indentured servitude. Georgia Works is a job training program, not a job creation program. How about some 21st century ideas, Republicans? Maybe even 20th century. Paul Ryan and his party seem to want the country to go back to the 19th century - or even earlier.
Originally published by this author at The Big Idea.