PA Unemployment and the Economic Recovery

The Pennsylvania Unemployment Rate for April 2010 is due to be announced by the Bureau of Labor Statistics on May 21st and PA unemployment levels are nearing double digits. But how does this affect the recovery within the state from the economic recession?

High unemployment remains the most difficult obstacle to economic recovery. And the surge in unemployment caused by the Great Recession also has exposed two parts of Pennsylvania unemployment compensation law that need to updated.

A new law would create a voluntary work-sharing program, by which some employers would be able to reduce hours for all employees rather than lay off some employees. The workers would be able to receive unemployment compensation for their lost hours. For example, a company pondering a 20 percent layoff instead could reduce total hours by 20 percent.

The company’s severance costs would be mitigated and it would not lose valuable skills or worry about having to retrain workers later. Workers would lose less money than through a layoff.

Sandi Vito, secretary of Labor and Industry, said the program has been successful in 18 other states. Pennsylvania should join them.

The second initiative would modernize the formula to calculate a laid-off worker’s eligibility for benefits. Now the state uses wage data from the first three of the last four quarters, excluding the current quarter. That system, a hold-over from the days of pre-computerized payrolls, renders about 30,000 Pennsylvanians ineligible for benefits, Ms. Vito said.

Adoption of the program also would make the state eligible for as much as $273 million in additional federal funding. So the program would not adversely affect the unemployment compensation fund.



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