Colorado Unemployment Benefits
How is the extension in unemployment benefits affecting your business?
A federal law originally was passed in 2008, and was extended through the end of 2011, that allows an unemployment benefit recipient to receive unemployment benefits for up to 99 weeks. Previously, recipients were eligible to receive unemployment benefits for 26 weeks.
It is not difficult to understand why the Colorado Unemployment Insurance Fund went broke and then required the State of Colorado to borrow over $350 million dollars to fund and pay Colorado unemployment claims. It is also not difficult to figure out that those costs are being passed along to the business owners.
In 2011, some companies received a rate increase that was quadrupled from the previous year. And, that is after already having their rates doubled in 2009/2010. The net effect is many businesses are paying SIX TIMES what they paid 2-3 years ago for state unemployment taxes, in addition to paying the extended benefits.
Additionally, many businesses recently received a letter from the Unemployment Insurance Division stating that the interest on the money borrowed from the federal government is coming due, an estimated $12 million dollars more. The Unemployment Office will be mailing bills to most business requiring an additional payment to cover that interest payment.
Small and medium sized companies simply can’t afford to keep paying the added costs and many are choosing, or being forced to further reduce their staff.
The extension of unemployment benefits isn’t just a Colorado issue. We are looking at a nationwide delay in business development and economic recovery due to this issue. Business owners across the country are taking a much more measured approach to growth, and will continue to avoid expansion and hiring until they can be sure customers will return and buy their good and services.
We are all aware that in this unstable economic climate, it is difficult to lose your job and have to transition to a new job or career. The problem in extending the unemployment benefits for so long is that it does not empower either the unemployed worker or the business owner. The unemployed worker develops a false sense of security and entitlement. The business community slows down on hiring new workers, the very thing needed in this country for our economy to grow, in order to manage the costs of supporting the unemployed.
The long term impact of this vicious cycle seemed to be overlooked by the government when they extended the unemployment benefits an additional 73 weeks, and state funds were rapidly depleted resulting in the need for federal loans.
Breaking this cycle is vital. We need to do everything we can to support small and medium businesses because they are the ones that are working every day to spur on our economic recovery. By taking a bigger interest in ourselves, our local businesses and our communities, we will be able to create more job opportunities and stop layoffs.
Implementing integrated polices to help regional economies grow and expand will allow us to start providing the best unemployment benefit of all… a job.
Supporting innovation from small and medium sized businesses, removing undue barriers to growth, and making access to capital a reality will not only lead to improvements in our society, but will also have a strong and lasting impact on our future.