Out of Work

October 5, 2009 by Dick.

When you’re out of work
the unemployment rate is 100%

Kay Ace (not her real name) lost her job on her birthday Friday. She filed an unemployment claim and began a new job search this morning.

The MegaInsuranceCo had cut her hours to part time last year but the falling real estate market and her rising salary (and age) made her too expensive to keep around. Her now former boss was told to hire a cheaper worker in her place.

U.S. job seekers now outnumber openings six to one, a new record and the worst ratio since the government began tracking open positions in 2000. According to the Labor Department’s latest numbers, from July, only 2.4 million full-time permanent jobs were open, with 14.5 million people officially unemployed.

With more people at home, only two indices have risen: the number of television hours watched and the birthrate. It seems we are making more unemployed workers naturally and taking in more “bright and shiny buy me now” advertising.

Vermont’s Unemployment Trust Fund will run out of money soon, most likely in January. The state expects to borrow about $160 million from the Federal government to keep the Trust Fund afloat through 2010.

“That won’t affect your Ms. Ace,” Representative Liana Leger (D-North Puffin) told me. “We have added employees at the offices to handle the increased unemployment claims and benefits will be paid on schedule.” Rep. Leger has held office since 1996.

In 1998, the legislature increased benefits without any new revenue, Vermont Labor Commissioner Patricia Moulton Powden said last week on You Can Quote Me. “Anyone who runs a business knows that when you spend more you have to have more income coming in.”

That 1997-98 legislative session was a very productive one for this state. Howard Dean (D-VT) was governor, Peter Shumlin (D-Windham) was Senate President pro-tempore (and now is a gubernatorial candidate), Michael Obuchowski (D-Windham) was Speaker of the House, and the assembly was in a spending mood. In addition to Act 101 (the act that changed unemployment compensation), the legislature passed a health insurance mandate that required plans to provide mental health coverage without establishing “any rate, term or condition that places a greater financial burden on an insured.” They adopted public campaign financing for the offices of governor and lieutenant governor to restrict “excessive campaign expenditures.” And they passed the Equal Educational Opportunity “to make educational opportunity available to each pupil in each town on substantially equal terms.” In a stroke of the pen, that “substantially equal access” to per pupil spending moved the revenue stream from the Towns to the State general fund.

Not surprisingly the Vermont economy has sunk.

The Vermont Legislature and the Vermont State Employee Association (the union for state workers) have each been pretty boneheaded about revenues this year. The lawmakers keep spending and the employees expect raises even as the governor tries to cut $7.4 million in labor costs.

Talks between Gov. Jim Douglas and the VSEA have broken down.

The State of Vermont had about 8,262 employees in 2008 which made the State the largest employer in the state for something like the 10th year in a row. The average salary of a state employee was $50,014 last year. That’s considerably more than Ms. Ace earned.

“These are the only employees in the state I can think of who have been accepting a couple of pay raises over the past few years and won’t come to the table to help us save their colleagues’ jobs and meet the needs of the state in this challenging fiscal and economic time,” Gov. Douglas said.

Lawmakers have said they are disappointed the two sides could not agree but it appears likely the state will raise taxes to make up for the revenue shortfall.

“It’s alright. We have elves in the cellar of the Statehouse,” Rep. Leger said. “They spin good Vermont straw into gold.”

“Leger” is not a French word for “gooberhead” no matter what the conservative pundits say.

I know. Maybe Ms. Ace can get a job with the VSEA.

Posted in Business, Society, Politics & News, Random Access | 2 Comments »