MUNSTER, Ind. (AP) — Supporters of a program that would give businesses an alternative to laying off employees during an economic downturn are planning to propose the idea again in the next state legislative session even though it failed to advance from committee earlier this year.
Republican Rep. Tom Dermody of LaPorte, who sponsored the work-share legislation last session, told The Times of Munster rted (http://bit.ly/1jr3rg5 ) there has been some discussion about the program not being needed as much now because the state’s economy is improving. But he said the state needs to be prepared for another economic downturn.
The program allows workers to receive partial unemployment benefits if their employer reduces their work hours to avoid layoffs. The proposal was supported by business, labor and anti-poverty groups but opposed by the state’s Department of Workforce Development.
Department spokesman Joe Frank said initial unemployment insurance claims in the state are at their lowest in 14 years and added: “the challenges and risks, including fraud, outweigh the benefits.” Indiana’s unemployment rate peaked at 10.8 percent during the recession in 2009 but has since dropped to 5.7 percent in May compared with a national rate of 6.3 percent, according to U.S. government figures.
Other states have adopted the work share program. Michigan and Ohio passed legislation to put the work share program into effect in their states, and Missouri recently reauthorized its program.
As part of The Middle Class Tax Relief and Job Creation Act of 2012, which was supported by Gov. Mike Pence when he was a congressman, Indiana would have been eligible for a $691,620 in implementation funds to launch the program this year and $1,383,241 in outreach funds to educate employers about the program.
The Center for Economic and Policy Research estimated in a 2012 policy paper that Indiana potentially could save more than $17.1 million in state unemployment costs through federal funding provided for three years under the program.
Dermody believes opposition to the program is because it can be viewed as a government entitlement and opponents feel government should keep out of the workings of private business. Frank said his department believes the program could hurt the solvency of the state unemployment trust fund.
Dermody sees the program as a way to help a segment of the population that politicians often say needs assistance.
“Everybody talks about the middle class, and this is a way to keep them working during the downturn,” he said.
Information from: The Times, http://www.thetimesonline.com