By Paul Tuthill
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Springfield, MA – Massachusetts officials hope that by freezing the state's unemployment insurance rate it will encourage businesses to create jobs. But it will come with an I-O-U as we hear from WAMC's Pioneer Valley Bureau Chief Paul Tuthill .
Under a bill approved unanimously by the Massachusetts legislature, and signed by Governor Deval Patrick, employers in Massachusetts will be spared a sharp increase this year in mandated payments to fund benefits to laid off workers. The administration says Massachusetts companies will save an estimated 411 million dollars. And, there will be no impact on unemployment benefit levels or eligibility, according to the Massachusetts Secretary of Labor and Workforce Development, Joanne Goldstein
Employer contributions to the unemployment trust fund are tied to the amount of reserves in the fund, so if lawmakers had not acted , there would have been an automatic increase of 228 dollars per employee. Massachusetts businesses in 2010 paid 638 dollars per employee to fund the unemployment insurance system..
Massachusetts and 29 other states have borrowed a total of 41 billion dollars from the federal government to pay unemployment benefits. Steve Poftak, the research director at the Pioneer Institute, a Boston based think tank says its no way to run an unemployment benefits system
The Pioneer Institute and the Massachusetts High Tech Council issued a report recently calling for reform in the Massachusetts unemployment insurance system. These reforms include reducing benefits from 30 weeks to 26 weeks to put Massachusetts in line with most other states, requiring people to have worked 20 weeks, instead of 15 to be eligible for unemployment and make employers with high worker turnover pay a higher rate
The Massachusetts unemployment rate in December was 8 percent. It was 9 point one percent in December 2009.. The January employment report will be released on Thursday, and Secretary Goldstein said she expects it will show the state created jobs in many sectors in 2010.
Kevin Lynn, the manager of business services at the FutureWorks Career Center in Springfield said January was the 9th consecutive month where posted job openings exceeded previous year
Lynn said it is taking the unemployed longer, on average to find a job. The number of people collecting unemployment benefits through the FutureWorks office last month was down 22 percent from a year ago.