BILL ANALYSIS �
SJR 18
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Date of Hearing: April 2, 2014
ASSEMBLY COMMITTEE ON INSURANCE
Henry T. Perea, Chair
SJR 18 (Beall) - As Amended: March 11, 2014
SENATE VOTE : 29-3
SUBJECT : Federal Unemployment Insurance Benefits
SUMMARY : Memorializes the United States Congress to renew
federally funded emergency unemployment insurance (UI) benefits.
Specifically, this resolution :
1)Makes numerous declarations regarding the value of emergency
UI benefits.
2)Declares that the California Legislature supports renewing
federally funded emergency UI benefits.
3)Directs the Secretary of the Senate to transmit copies of the
resolution to the:
a) President of the United States
b) Vice President of the United States
c) Speaker of the House of Representatives
d) Majority Leader of the Senate
e) Minority Leader of the Senate
f) Each Senator and Representative from California
EXISTING LAW
1)Provides state funded UI benefits to employees who lose their
job for up to 26 weeks.
2)Requires employers to pay the state unemployment tax which
provides funding for the first 26 weeks of UI benefits.
FISCAL EFFECT : Undetermined
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COMMENTS :
1)Purpose . According to the author, because federally funded UI
benefits expired as of December 2013, this resolution is
crucially needed to urge Congress to extend unemployment
benefits to millions of people in dire need of aid. California
has a high rate of unemployment and families are suffering
without that financial help. While it is understandable that
this program was not going to last forever, this is happening
during a time where extended UI benefits are needed the most.
The author cites statistics published by the Employment
Development Department that show, as of February 2014, close
to 1,273,100 unemployed workers in California have exhausted
all available UI benefits.
2)Extended Benefits . Beginning in 2008, the federal government
provided benefits to UI claimants who exhausted their state
funded UI benefits. The duration of federal UI benefits grew
in response to the massive unemployment many states
experienced during the Great Recession after the financial
crisis. Federal benefits peaked at 73 weeks in California
(for a total of 99 weeks when combined with 26 weeks of state
benefits) and the number of weeks then began to decline over
time based on a long series of federal appropriations
continuing the funding for extended benefits. Federal
extensions of UI benefits expired completely at the end of
2013. EDD estimates that over 220,000 Californians lost
benefits as a result. Congress has considered a number of
proposals to reinstitute extended benefits, but none have been
enacted.
3)Long-Term Unemployment . According to a recent report issued
by the White House, the nation is still struggling with a
crisis of long-term unemployment left in the wake of the Great
Recession. Data suggests that many of the remaining
unemployed individuals have been unemployed for very long
periods.
As of December 2013, there were 3.9 million long-term
unemployed who had been out of work for 27 weeks or more,
and about 2.6 million of these people had been looking for
work for 52 weeks or more.
Long-term unemployment remains 2.5 times higher than the
pre-crisis average, while the short-term unemployment rate
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of 4.1 percent has fallen to its pre-crisis average.
The long-term unemployed are 37.7 percent of the overall
number of unemployed - well above the pre-recession high of
26 percent reached in 1983.
Recent research suggests that the long-term unemployed face
significant disadvantages in the labor market simply by virtue
of their status as being long-term unemployed.
Even as hiring rates have increased generally, employers
have preferred those who recently became unemployed to
those with longer spells of unemployment. A policy brief
published by the Federal Reserve Bank of Boston observed
that, following the recession, the long-term unemployed
have not benefitted from job openings to the same degree as
the short-term unemployed.
Typically, as job vacancies rise, unemployment falls in a
relationship that remains stable over an extended period of
time. The Federal Reserve Bank researchers find however,
that during the recent recovery, when controlling for
differences in industries, blue-collar vs. white collar
work, age, education levels, and length of unemployment,
the short-term unemployed are benefiting far more from the
increase in the vacancy rate than the long-term unemployed.
This trend also is reflected in data on job-finding
rates, which show that the rate at which the unemployed
find jobs declines sharply with the duration of
unemployment .
4)Suggested Amendment . The resolution refers to California's
unemployment rate which has fallen notably since the
resolution was last amended. The author may wish to update
that information and add findings and declarations reflecting
recent research relating to the unique challenges faced by the
long-term unemployed.
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation
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Opposition
None received
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086