NOTE: As part of an ongoing series, Statehouse Report will offer a look into policy proposals that would impact the state's most vulnerable citizens. In this issue, editor Bill Davis focuses on bills related to unemployment benefits.
FEB. 10, 2012 -- A series of Republican-backed bills that could directly affect South Carolinians on the receiving end of state unemployment checks has drawn sharp rebukes from critics who contend that the out-of-work are being asked to shoulder too much of the burden of the state’s weak economy and mistakes already made by state government.
Consider that between April 2008 and January 2011, the state’s unemployment rate more than doubled, from barely under 6 percent to just under 12 percent, according to government data.
The current unemployment rate of 9.5 percent, then, has been hailed as an improvement, despite the number of residents out of work increasing by close to 40,000 in that nearly four-year span.
Setting the stage
Before the unemployment rate went South, legislators cut the amount levied on employers to pay for unemployment benefits. Why? Because they thought the fund had too much money in it.
But as the economies of the state, nation and world started to spiral down, whispers began that the state’s unemployment fund might be unstable if the state were hit with a wave of the unemployed. Then in a huge failure of alarm when the unemployment rate started rising, the few whispers went unheeded and finger-pointing soon began. Not too long later, the state’s unemployment agency’s debt grew to about $1 billion.
Some legislators claim that the agency, since overhauled and renamed the Department of Education and Workforce (DEW), understated the problem and under-informed the legislature to the scope of the looming deficit.
Other lawmakers say that the reason the agency’s deficit ballooned so much was that politicians at the time were wary of increasing employer contributions to the unemployment insurance trust fund because it was seen as raising taxes, an anathema to political success in South Carolina.
Partly as a result of the tumult, four bills have emerged that seek to right the out-of-work ship. The question, though, is are they righting the ship by using struggling out-of-work families as ballast?
Tightening the noose
Companion bills in the House and Senate would require those receiving unemployment be subject to drug testing, and that those who test positive be removed from the government dole.
Another bill would levy more serious punishments on unemployment check recipients who provide false statements in their applications or weekly updates.
And a third measure would require the unemployed to accept jobs that pay less and less as their time as recipients increases.
Wanting to get in on the act, Gov. Nikki Haley has also ordered DEW to stop unemployment benefits to workers on strike. A companion bill has been introduced.
Sen. Paul Campbell (R-Goose Creek) may have the least criticized bill of the lot. Campbell wants to have unemployment recipients “volunteer” 16 hours a week at local schools, parks and the like.
Campbell argues that such a requirement will get the out-of-work out of the house and into the working world where they will be better able to network. Critics point out that if people are required to do something, they can’t be considered volunteers.
What critics say
Critics say bills that target the unemployed are bad for the state. Victoria Middleton of the state’s ACLU chapter and Sue Berkowitz of the state’s Johnny Appleseed Legal Justice Center said they worried such bills put the burden on the least culpable for the problems: the workers.
House Minority Leader Harry Ott has joined Middleton's and Berkowitz’s chorus.
“There is no way this state’s governor, or administration, or Republican Party can say they are looking out for the working people of South Carolina,” said Ott.
State Sen. Brad Hutto (D-Orangeburg) lumps the “assault” on unemployment benefits as election year politics, and says they are clearly “punitive toward the workers.” Hutto foresees a tough floor battle for any of the bills, with Democrats attaching untenable amendments to the bills in an attempt to kill them.
Who is paying for all this?
Not so fast, says Otis Rawl, president and chief operating officer of the S.C. Chamber of Commerce. Rawl said employers and businesses are paying their portion, if not more, of the DEW deficit via changes and increases to the unemployment trust fund.
Rawl said the Chamber was asked to consult on several of the bills being proffered.
House Majority Leader Kenny Bingham (R-Cayce) has big problems with the DEW deficit being laid at the feet of the legislature. “Don’t blame me for something I didn’t know about,” he said referring to the fight as to whether DEW’s predecessor did enough to alert legislators to the mounting problem.
Those looking for blame may want to cast an eye at Democrats, like Ott and Hutto, and ask the question, “What are you guys doing?” Ott agrees that, so far, that no Democrat has filed a single bill in response to the GOP’s slew.
“Could we be doing more?” asks Ott, demurely. “Yes.”
Laughing, Ott said he has been inspired by the story of a Democratic member of the Virginia General Assembly who has proposed a bill that if women are required to view an ultrasound of a fetus before having an abortion, then men should have to subject themselves to a rectal exam prior to receiving a prescription for erectile dysfunction.
Crystal ball: Creating another class of laws for the unemployed won’t be popular on the floor of the Senate or the House. It will make great fodder back home on the campaign trail. The fight to get all the unemployed drug-tested -- versus cheaper and arguably more effective random testing -- brings back memories of the 1986 U.S. Senate debate when then-incumbent Sen. Fritz Hollings (D-S.C.) responded to a challenge by Republican candidate Henry McMaster to take a drug test with the quip that he’d be happy to do so if McMaster would “take an I.Q. test.”