Tucson CitizenTucson Citizen

Do the math: Az’s benefits for jobless set too low

Citizen Staff Writer
Our Opinion

Last week’s joblessness numbers are, of course, depressing. The U.S. unemployment rate rose to 8.1 percent in February. Nationwide, it is conceivable that by year’s end, nearly 1 in 9 Americans will be out of a job.

For the more than 16,000 Tucsonans thrown out of work since the recession began in December 2007, the grimmest number they must deal with is 265. That, in dollars a week, is the maximum unemployment benefit an Arizonan can receive.

That number is too low. It’s not enough to live on. It needs to be raised.

By any standard, Arizona’s unemployment benefit is inferior. Only Mississippi ($235) and Alabama ($260) have lower caps on weekly payouts.

The U.S. average weekly benefit check – not the maximum – is $293. Last year, The Los Angeles Times estimated, unemployment benefits covered only 18.9 percent of the cost of living for jobless residents of Phoenix – third worst of any major city analyzed. (The best city? Pittsburgh, where Pennsylvania’s $539 maximum would cover 46.9 percent of living costs.)

To put Arizona’s benefit payout in perspective: The federal poverty line for a family of two (say, a single mom of one child) is $14,570 a year. A year of maximum benefits in Arizona is $13,780 – except that benefits are available for just 39 weeks.

Money for unemployment benefits comes from state and federal unemployment insurance taxes employers pay. The federal tax is 6.2 percent on the first $7,000 in annual wages to each employee.

State tax rates vary; Arizona ties numerous states with the lowest rate, 5.4 percent. Also varying is the amount of each worker’s income subject to the tax. In this area, too, Arizona is at the bottom. While some states subject as much as $34,000 to the tax, Arizona subjects the minimum, $7,000.

But simply raising employers’ taxes is not the answer, not when they, too, are hurting from the recession. And realistically, Arizona’s slash-and-burn Legislature isn’t likely to raise taxes on small businesses.

The money must come from the federal government, which also should set a nationwide minimum for benefits paid to people engaged in sustained employment before they lost their jobs.

(In Arizona, earning as little as $2,000 a month for three months can qualify you for maximum benefits.)

The exact amount would be subject to debate. With $300 a week, for instance, the single mom of one child would be above the poverty line.

To its credit, the stimulus package passed by Congress last month included a $25-a-week boost in unemployment pay. But more needs to be done as the downturn deepens.

Congress and the Obama administration have forked over hundreds of billions to bail out bad bankers.

They need to realize that good workers in Arizona and elsewhere – victims of the recession – need more of a fighting chance.

Our Opinion

Raising taxes on the state’s businesses is not the answer, not when they too are suffering in the recession.

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