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November 25, 2007
Of the economic development measures left on the table when the Legislature closed its formal session last week, few would do more good — and at no cost to the public — than the proposed rate freeze on unemployment insurance. Failure to act sends an anti-business message Massachusetts cannot afford to project.
The lack of action in 2007-08 session to date is a disappointment to businesses groups such as Associated Industries of Massachusetts, which has campaigned hard for rates that better reflect the actual cost of unemployment benefits.
Consternation is justified. Despite assurances of support from legislative leaders, opposition by the Patrick administration and unions has blocked the freeze.
The opposition is unwarranted. As AIM points out, there is a more-than-adequate cushion in the employer-supported Unemployment Insurance Trust Fund, which should close out this calendar year at more than $1.12 billion. Even with a freeze, AIM calculates, employers would pay $1.4 billion into the fund in 2008, bringing it to $1.3 billion after benefits.
Unreasonably high unemployment insurance rates stifle economic growth, hold down wage increases and boost the cost of doing business in Massachusetts — all for no good reason. Legislative leaders should place enactment of this important measure high on the agenda.
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