Every year the state sends me a form that tells me what my rate for unemployment taxes will be for the next 12 months. The form states that I can appeal it, but I have no idea how or why I’d do that and I don’t believe the effort would bear fruit.
The issue I would like to appeal is the fact that this is a tax on companies and not workers. For instance construction companies that lay people off frequently pay a higher rate to the state. But the workers in these fields know this and are used to this and knowingly decide to enter that field. My guess is they make this decision because the jobs pay well and they can afford periods of zero income after working periods with lots of overtime at good wages.
So the cost of construction is higher, which leads to less customers being able to afford new construction, which decreases demand and increases seasonality, which leads to more unemployment. It would make more sense that individuals were required to fund their own unemployment accounts. The funding rate should go progressive. When you make more money more money goes into the fund. There should also likely be a rate determined by the industry so that people who knowingly go into an industry with higher unemployment periods pay more. Once you’ve established a long period of steady employment and you’ve built up a balance in your fund your contribution rate can decrease.
This would reward the best workers who stay steadily employed and motivate the workers who can’t seem to keep a job to change.
The biggest benefit, though, is that it would allow companies like mine to hire someone for the month that we need them without penalty. Wouldn’t it be better to give people work for the holiday period than no work at all? That answer seems obvious, but if I hire someone for a busy period I have to consider the fact it will cost me more money on all my employee’s wages if that person files for unemployment when they are done working for us.
Overseas outsourcing is very common in the ecommerce industry. There are lots of people in Asian countries who are taking customer service jobs at $3 to $5 an hour. It’s hard to blame companies for hiring overseas when having employees has so many costs in addition to wages. So far I’ve managed to have only US based workers and we pay full benefits. But that is very expensive and it puts us at a disadvantage to companies that hire overseas.