Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, July 6, 1990 TAG: 9007060628
SECTION: EDITORIAL PAGE: A=11 EDITION: METRP
SOURCE: HUGH O'DONNELL
DATELINE: LENGTH: Medium
Jobs of any sort are hard to come by in the Virginia coalfields. So Mary settled for part-time work in the hope "something" would develop.
What developed was a layoff. The employer gave Mary no explanation. She thinks it may have been related to a raise she was scheduled to receive the following month.
After Mary was laid off, she applied for unemployment compensation. Mary learned she was ineligible.
The local Virginia Employment Commission official explained that to quality for benefits, she needed total earnings of $2,800 in the two highest quarters of her "base period," a four-quarter period prior to job loss. Because her earnings at her minimum-wage job totaled only $2,613, Mary fell $187 short.
Technically, Mary was denied unemployment compensation because, according to the law of Virginia, her work was insufficient to "attach" her to the labor market. The technically accurate answer misses a larger and more disturbing truth.
America's unemployment-compensation system was organized during the Depression to protect unemployed workers - and their families - as they searched for jobs. Lawmakers recognized that periods of unemployment might be prolonged, particularly during a depression or recession. The goal was to keep those who could work from ending up on relief.
Thus, the intent was to protect society as well as workers. The means of protection was the unemployment-compensation trust fund.
Under federal law, each state was required to establish its own trust to assist the unemployed. Employers would contribute to the fund, with the required amount dependent upon such things as payroll size and the employer's own experience with the system.
Under the classic notion of unemployment compensation, only those workers who were genuinely "attached" to the labor market would receive benefits. Attachment was to be measured by the workers' earning record. If the worker's wages failed to qualify, he or she was not considered part of the labor market and therfore did not need the same protection as workers who were attached.
Each state was allowed to set its own eligibility requirements. As a result, there is wide variation among the different states. Virginia's working poor are victims of this variety.
The level of qualifying wages set by Virginia has steadily increased until it is higher than any other state's. In Tennessee, for example, the two-highest-quarter rquirement is only $780.01 - or 28 percent of what it takes to qualify in Virginia. In South Carolina, a worker need earn only $900 for the entire base period, provided those earnings total at least $540 in one quarter.
In Virginia, the original concept of measuring attachment to the labor market has given way to a system that sets the qualifying wages so high that many won't be covered - especially part-time employees earning minimum wage.
This benefits employers who make heavy use of such workers, since it minimizes their required contribution to the trust fund. But it unfairly penalizes the working poor and ultimately adds to the burden of Virginia's taxpayers.
An employee who worked much less than Mary over the past year would be "attached," provided his or her hourly rate was higher than the minimum wage. If Joe worked only 10 hours a week but received $15 an hour for his skilled labor, his earnings would easily qualify him for benefits.
Such inequities discourage people like Mary from working and increase the likelihood they will end up on welfare. Is this what we really want?
by CNB