California may pay unemployment to striking workers. But the fund to cover it is already insolvent
Some California lawmakers want to make striking workers eligible for unemployment benefits
SACRAMENTO, Calif. — Southern California's summer of discontent — marked by a series of work stoppages from hotels to Hollywood — has inspired labor-supporting Democrats in the state Legislature to try and change the law so striking workers can get unemployment checks while they picket for better pay and working conditions.
The bill, introduced this week, would make California just the third state to do this, joining New York and New Jersey. But unlike most states, California currently doesn't have enough money to pay the benefits owed to unemployed workers. Business groups who oppose the bill argue making more people eligible for those checks will only make the problem worse.
Labor unions and progressive policy groups say businesses are to blame for not putting enough money into the fund that pays unemployment benefits. The fund is filled by a tax that businesses must pay per each worker. But the tax only applies to the first $7,000 of employee wages — a figure that have not changed since 1984 and is the lowest amount allowed under federal law.
The state Legislature has twice increased unemployment benefits since then, once in 1989 and again in 2001. It's why California's unemployment insurance trust fund “has consistently been one of the most imbalanced in the country,” said Jared Walczak, vice president of state projects for the Tax Foundation, a nonpartisan tax policy group.
“Something has to give,” he said. “Either the benefits need to be less generous or the tax is higher or both. But the state has just chosen to live on the edge for decades.”
The issue could cause one of the biggest fights in the final weeks of California's
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