From the Daily Record:
Speaking as a panelist before the state’s biggest business lobby last month, Assembly Republican Leader Alex DeCroce must have thought his opinion that the state’s unemployment benefits were too generous would resonate with the audience.
It may have. But soon after the New Jersey Business and Industry Association panel discussion ended, The Associated Press reported his comments to a wider audience, including his observation that jobless benefits “are too good for these people” and don’t provide enough incentive to return to work.
Senate President Stephen Sweeney, who shared the stage, fumed. And DeCroce the next day tried to apologize, if not to his Democratic colleagues, at least to unemployed workers.
“My comments were made to a gathering of business leaders and I wanted to convey the need to fix a system that is on the verge of collapse,” he said in a statement. “I wanted to emphasize that there are individuals who are gaming the system (and) contributing to its current state.”
That system is broken. For the third consecutive year, New Jersey likely won’t have enough money to pay benefits to jobless workers, forcing it to borrow from the federal government.
It leaves employers facing another premium increase. It leaves business and labor leaders to hash out ways to improve the unemployment system and keep their constituents satisfied. And it leaves observers hoping that the state will address the root of the problem: The recession and slow recovery have left thousands of people out of work for so long that their skills have become outdated.
“I think there was an implication (in DeCroce’s remarks) that people who collect unemployment have an entitlement mentality,” said John Sarno, president of the Employers Association of New Jersey, a Livingston-based organization that advises employers.
Workers who lose their jobs this year through no fault of their own are entitled to receive two-thirds of their wages, up to $598 a week. The top benefit fell from $600 last year because the state’s average wage in 2009, used to determine benefits, declined for the first time in 40 years.
The money for jobless benefits comes from an unemployment trust fund financed both by taxes on employers and workers. The amount employers pay depends on how often their workers file claims. It ranges this year from .4 percent to 5.4 percent. Employees pay .38 percent. Employers and employees pay taxes on wages up to $29,600. So a worker who makes more than $29,600 will pay $113.22 for the year.
New Jersey’s insolvent unemployment trust fund is a product of its own making. Lawmakers from 1992 to 2006 diverted $4.6 billion from the fund to pay for other programs, leaving it on thin ice if the unemployment rate were to soar unexpectedly.
The economy collapsed in late 2007, and the unemployment rate climbed from 4.5 percent in December 2007 to 10 percent two years later, a 33-year high. It was 9.2 percent in November, according to the most recent statistics.
The result: New Jersey in 2009 paid $3.2 billion in benefits and collected $1.9 billion in premiums. Last year, it paid $3.4 billion in benefits and collected $2.2 billion in premiums. Its cushion gone, the state borrowed $1.75 billion from the federal government the past two years to pay benefits, according to the Department of Labor and Workforce Development.
Christie in his proposal last Februrary to reform the unemployment system supported a $50-a-week cut in maximum weekly benefits. New Jersey last year had the fourth highest benefit — behind Massachusetts, Rhode Island and Connecticut, according to the National Employment Law Project, a worker advocacy group.