The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Unemployment funds going broke

Oct 6, 2008

Michigan’s unemployment fund is out of money, with the state owing 225 million dollars to the federal government at the end of August. And unemployment insurance funds in California, New York and Ohio are running low and could run out of money before this year is over.

These states are not alone. According to the National Employment Law Project, an advocacy group for the unemployed, 32 states’ unemployment funds have fallen below one year’s worth of benefits.

This news comes at a time when the economic crisis is deepening, with unemployment rising in the whole country. And everybody knows we haven’t seen the worst of it yet!

Politicians and government officials can’t claim they didn’t see it coming. In 2001, for example, California Labor Department officials testified that the state’s unemployment fund would go broke because the amount employers were taxed had not kept up with inflation for 25 years. But the California legislature, controlled by the Democratic Party, has done nothing about it. Nor has Republican Governor Schwarzenegger since he took office in 2003.

It’s not an accident that the states’ unemployment funds are running out of money just when they are most needed. Politicians – both Republican and Democrat, including those who claim to be “friends of labor” – have deliberately undertaxed companies, letting them avoid their responsibility for unemployment. When it comes to a choice between the bosses’ profits and the unemployed, both parties took the bosses’ side.