Unemployment reform efforts divide Tennesseans

7:31 AM, Apr 2, 2012   |    comments
Erica Barber fills out an application during a job fair Thursday in Dickson. / George Walker IV / The Tennessean
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By Duane Marsteller, The Tennessean

Joseph Green wonders if he has a target on his back - and if it's about to get bigger.

The Springfield man said he sometimes feels as if he's being labeled as a second-class citizen because he has been out of work for nearly two years.

But with state legislators considering tougher rules and more paperwork before the unemployed can collect benefits, plus a proposal to block payments if new claimants fail job-related drug tests, Green sees the political atmosphere going from bad to worse.

"I feel like it's discrimination, especially against us folks who live out in the country where there aren't that many jobs," he said.

Tennessee is among several states that have restricted or want to restrict jobless aid by reducing benefits, tightening eligibility criteria and mandating minimal job-search efforts and possible drug tests of recipients, among other measures.

Those pushing the reforms in Tennessee, primarily Republicans and business groups, argue that the changes are needed to improve accountability and crack down on fraud and abuse.

"The Great Recession exposed holes in our unemployment system, and these bills fill those holes," said Jim Brown, Tennessee state director for the National Federation of Independent Business, a small-business advocacy group.

But critics, including labor leaders and some Democrats, say the measures are too broad and unfairly target the unemployed.

"They're looking at every angle they can in order to keep people from going on unemployment," said state Rep. Gary Moore, D-Joelton, who is president of the Tennessee AFL-CIO Labor Council. "Sure there's people abusing the system, but you go after the abusers, not punish everybody else."

Business fears costs

Tennessee lawmakers are considering a half-dozen bills that would tighten eligibility and make it easier to deny benefits, which now average $234 a week. The maximum benefit is $275 a week in the state.

Most of the measures originated from business owners, who frequently complained about the unemployment program during a statewide series of meetings with Lt. Gov. Ron Ramsey last year. Ramsey is championing several of the bills, which are making their way through committees in the legislature.

Brown cited the case of a Maryville pharmacy worker who won unemployment benefits despite being fired for theft and chronic absenteeism. In other cases, seasonal workers routinely collected unemployment during their offseason, he said.

"We don't need to be paying benefits to people who were fired for stealing or not showing up for work," said state Sen. Jack Johnson, R-Franklin, the primary sponsor of several of the bills. "We're just trying to protect the integrity of the system."

Worker advocates say they support fighting fraud and waste, but argue that some of the proposals go well beyond tightening safeguards.

"It's bad," said Bill Bush, an attorney for Legal Aid Society of Middle Tennessee and the Cumberlands. "This is the worst time to try to cut back on unemployment eligibility. They're trying to make it harder for people to get unemployment compensation. It will make them more desperate."

The bills are being debated as the statewide and county unemployment rates have eased lower.

Tennessee's seasonally adjusted jobless rate was 8 percent for February. The Nashville-Murfreesboro region had 7.1 percent unemployment for February, the latest labor data show. Both rates are 1.5 percentage points lower than a year earlier.

One act on fast track

The primary Tennessee bill, dubbed the Unemployment Insurance Accountability Act, has cleared several committees and appears headed for approval, Johnson said. However, the drug-testing requirement's chances of passage are remote because of federal privacy concerns. Other bills likely will pass, he believes.

Gov. Bill Haslam's administration originated a proposal to expand the state's power to collect benefit overpayments to recipients and will support "the will of the legislature" on a measure denying benefits to workers fired for not obtaining a required license or certification, spokesman Dave Smith said.

As for more-controversial proposals, Haslam said his administration is still weighing them.

"We're in the middle of evaluating things right now, and we'll probably come back next with our recommendations on which ones should be adopted in the budget," he said after an appearance Friday at LP Field.

Tennessee isn't alone in targeting jobless aid.

A South Carolina proposal would yank benefits to those who fail or refuse an employer's drug test. A bill in Georgia's legislature would cut benefits by up to half. Proposed legislation in Arizona would implement drug testing and minimum work-search requirements.

Fallout from the recession is driving the efforts.

States collect unemployment taxes from employers and use that money to pay benefits. But they've been taking in less and paying out much more because of prolonged high unemployment. More than 30 states have borrowed from the federal government to pay benefits, the National Employment Law Project said.

Tennessee briefly borrowed $50 million to cover a shortfall in 2010, after draining a $600 million surplus in its unemployment trust fund in just three years. The state also increased and expanded unemployment insurance premiums charged to employers. The fund has since stabilized and now has a balance of $241.8 million, the Tennessee Department of Labor and Workforce Development said.

The agency estimates the proposed bills would save at least $38.2 million annually by disqualifying at least 6,000 people from benefits. About 110,000 Tennesseans now receive unemployment, spokesman Jeff Hentschel said.

Unemployed Tennesseans have mixed feelings about the potential changes.

Becky Cannon, laid off from New Life Lodge in September, said she's fine with the drug-testing, work-search and other potential requirements.

"If you're truly trying to find a job, you shouldn't have a problem with it," she said while attending a job fair last week at Goodwill Career Solutions in Dickson.

But Raymond Foreman, who lost his auto mechanic job four months ago, thinks "good people" will be hurt by the rules.

"I get that there probably are people sitting on the rolls getting government checks and not doing anything," he said as he filled out a job application at the job fair. " But there are other people - good people - who are going to get hurt too."