Californaia asks U.S. for loan to pay jobless

Date: Monday, December 22, 2003 5:44 PM

JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

California is in desperate shape, and the article below is just one
more warning that the massive jobless rate is causing bad budget stress
in our states. The article stops short of explaining why California is
having trouble funding unemployment, but fortunately Kim Berry got a
letter to the editor published that explains it.

Kim Berry is the President of the Programmer's Guild
http://www.programmersguildusa.com/

Board Member of NAEA
www.naea.us

Webmaster and creator of:
http://www.familyinjustice.com/

He also supported Ken Hamidi's election campaign for California State
Governor, and created his website:
http://www.governorken.org/

http://www.sacbee.com/content/politics/story/7940704p-8878007c.html

A first: State asks U.S. for loan to pay jobless

By Melanie Payne -- Bee Staff Writer
Published 2:15 a.m. PST Friday, December 12, 2003
For the first time in California history the state is asking the
federal government for a loan to pay benefits to unemployed workers.
The unemployment trust fund, which stood at $6.1 billion less than 18
months ago, dwindled into insolvency as the economy continued to slump,
more high-wage workers lost jobs and a state law increased unemployment
payments.

For example, the maximum weekly benefit in 2001 was $230. The maximum

benefit rose to $370 in 2003, and it will increase to $410 in January.

On Thursday, the state Labor and Workforce Development Agency asked the
U.S. Department of Labor for a loan of up to $1.3 billion to pay
benefits to the estimated 3 million workers who will apply for
unemployment in 2004.

"This is not the answer; it's only a stopgap measure," said Rick Rice,
the assistant secretary of the Labor and Workforce Development Agency.

But borrowing from the federal government "will at least keep the
checks flowing."

The state should be able to pay the bulk of the loan in May, Rice said,
after employers have paid the first installment of their 2004
unemployment taxes.

If the loan is paid back before Sept. 30, it will be interest-free. If
not, the interest rate will be 6 percent.

California is not the only state requesting a loan to pay unemployment
benefits. Also asking for federal help are Texas, Minnesota, New York,
Missouri, Illinois and North Carolina.

A work group of representatives from business, labor and academia has
been meeting over the last few months to draft recommendations on
revamping the state's unemployment system. Its report is due to the
governor and lawmakers by the end of the year, said Loree Levy,
spokeswoman for the Employment Development Department.

Until then, the federal money will be available as needed. It comes
from a federal tax that employers pay called the Federal Unemployment
Tax Act.

About the Writer

The Bee's Melanie Payne can be reached at (916)321-1962 or
mpayne@sacbee.com.

http://www.sacbee.com/content/opinion/letters/story/7989729p-8926363c.html

Federal jobless help

Re "A first: State asks U.S. for loan to pay jobless," Dec. 12: To the
extent the federal government and U.S. Department of Labor have caused
our state's unemployment, California should seek $1.3 billion as
compensation rather than a loan.
Federal free-trade agreements enticed U.S. corporations to transfer
jobs and technology overseas: The R&D for Intel's Pentium replacement
is being done entirely in India; HP, while trimming 2,000 from
Roseville's head count, has hired 10,000 tech workers in India; Oracle
in Rocklin is forcing 175 Americans to train their Indian replacements.

Since 2000, the Department of Labor has granted a record number of
foreign worker visas -- roughly 500,000 - even as the number of jobs
has declined. According to the Bureau of Labor Statistics, 20 percent
of computer programmers are either unemployed or have been displaced
from their profession. Yet the Department of Labor continues to grant
foreign tech worker visas, including several hundred this year in the
Sacramento region.

These are federal acts beyond California's control. Our governor has
pledged to protect California jobs. He should demand that the federal
government fund its own incompetence.

- Kim Berry, Citrus Heights

Board Member, National Assn. for the Employment of Americans
www.naea.us

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