Recently, the Georgia Department of Labor announced that the unemployment rate for July was 9.3 percent, marking the 59th month in a row that Georgia’s unemployment rate has exceeded the national average.
Perhaps even more disturbing is the fact that after falling below 9 percent in April for the first time in more than three years and either decreasing or holding steady for the previous 10 months, the unemployment rate in June started increasing again.
As of June, only seven states, including Washington, D.C., have higher unemployment rates than Georgia. Nevada has the highest at 11.6 percent. North Dakota, with a 2.9 percent rate, has the nation’s lowest rate.
On a brighter note, the number of long-term unemployed — those who have been out of work longer than 26 weeks — decreased to 225,400 in July, or around 51 percent of all of those unemployed.
During the great recession, which began in 2008, Georgia depleted its unemployment-insurance trust fund in order to pay out benefits. Georgia also is one of 20 states (including the Virgin Islands) that has had to borrow money from the federal government to keep our fund solvent. As of Aug. 14, our outstanding balance owed to the federal government was $742 million.
In an effort to pay back the loan and prevent the fund from further insolvency, earlier this year the Legislature passed Senate Bill 347, cutting jobless benefits while increasing unemployment benefits paid by employers.
With this legislation, Georgia becomes one of 11 states that have cut jobless benefits in the past year by decreasing the duration or level of payouts or by restricting eligibility. Coupled with the slight increase in employer costs, SB 347 offers a balanced approach to controlling this potential financial disaster.
Also earlier this year, the State Labor Commission instituted a rule change, based on state law, pertaining to educational private contractors such as school-bus drivers, cafeteria workers, crossing guards, etc., who file for seasonal unemployment benefits.
In the early 1970s, Washington ruled that public-school teachers, whose salaries typically are paid out over 12 months, were not eligible for unemployment benefits during summer breaks. Teachers, who expect to be back at work in the fall, are not considered laid off, which is the main criteria to receive unemployment benefits.
The commission ruled that it is unfair for contractual workers to receive seasonal unemployment benefits when public-school system employees do not. After all, private contractual workers have the same probability of returning to work as public-school employees do.
Recently, the U.S. Labor Department ruled the commission’s interpretation to be wrong and demanded it be overturned. The commission, in turn, has asked the Georgia Attorney General’s office for guidance.
However this scenario plays out, one thing is certain — Georgia’s continued unemployment challenges are creating an enormous amount of strain on the unemployment insurance trust fund.
Carter can be reached at Coverdell Legislative Office Building (C.L.O.B.) Room 301-A, Atlanta, GA 30334. His Capitol office number is 404-656-5109. You can connect with him on Facebook at facebook.com/buddycarterga or follow him on Twitter @Buddy_Carter.