Georgia puts focus on re-employing the jobless

With slightly more than $1 billion, Georgia’s Unemployment Insurance Trust Fund is relatively solvent. Labor Commissioner Michael Thurmond plans to keep it that way, even as the state’s jobless rolls swell. Thurmond recently talked about the health of the unemployment insurance fund and where Georgia’s job market is headed. Here are excerpts:

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Georgia Labor Commissioner Michael Thurmond.

Q: How’s Georgia’s Unemployment Insurance Trust Fund doing?

A: We now have $1.06 billion. We paid out $85 million in benefits in October. That’s not normal. That’s up. In October a year ago, we paid out $46 million.

Q: Unemployment insurance trust funds are generally replenished by taxes from employers during the first quarter of the year. How does the first quarter of 2009 look?

A: We expect in the first quarter to collect between $300 [million] and $400 million. That’ll probably be a little bit down with fewer insured employees and fewer businesses due to closures.

Q: What’s being done to maintain the solvency of the fund?

A: First and foremost, it’s duration. By limiting duration (the time a person spends collecting unemployment), that reduces the reliance on the trust fund and that protects solvency. We have the shortest duration in the nation. … Rather than allowing people to exhaust benefits, we get them back to work quicker. Right now, it’s 11.8 weeks. That’s 3.7 weeks quicker than the national average. That generates $185 million in savings to the trust fund. … Georgia is one of the few states that focuses on re-employing the unemployed. In many states, you don’t have to register for re-employment services to get unemployment benefits. In Georgia, you do it simultaneously.

Q: How much is the unemployment benefit?

A: Unemployment insurance represents about a third of a person’s salary prior to layoff. The maximum is $330 a week before taxes. Obviously, it’s not a king’s ransom. We view unemployment benefits as a secondary benefit. The primary benefit is re-employment and support assistance.

Q: Where do you see the unemployment rate headed next year?

A: About 30 days ago, the economists were saying 8.5 percent. Last week, I heard between 9 [percent] and 10 percent nationally.

Q: What about Georgia?

A: State economists say it easily could be 8.5 percent to 9 percent next year at this time.

Q: What do you see as the main task of your job now?

A: My No. 1 concern is to protect the solvency of the fund. Part of my job also is keeping people encouraged. It’s hard to really see it when we have so much unemployment, but jobs are still being created and filled even in a down economy. That’s why the re-employment efforts we provide are so critical, not just to maintain the solvency of the trust fund but to keep the economy going.

Q: At what point would the unemployment rate have an impact on the trust fund?

A: It’s a finite resource. We’re very fortunate to be one of the 18 to 20 states not facing immediate insolvency. Thirty states are facing immediate insolvency. People will still get their unemployment checks even in states that are insolvent because they’ll borrow from the federal government. If we have to borrow, we could increase tax rates for employers and that could negatively impact economic expansion because employers will be saddled with higher taxes.

Q: At what point would you get worried about the fund?

A: It’s the last thing I think about before I go to sleep at night and the first thing I think about when I wake up in the morning. I’m not worried. But I am concerned. It’s really not immediate. We’re going to get through 2009. [I’m concerned about where] we’ll be in 2010. It all depends on how deep the recession is and how quickly we rebound.

Q: What needs to be done at the federal level to create better conditions for unemployment insurance trust funds nationally?

A: We have to reinvest again in re-employment efforts. There should be a national push. So many states don’t have [re-employment services].