Well, I guess I didn’t make any friend in the newspaper business yesterday when I wrote about some newspapers’ week-long furlough scheme. I understand that they are in a difficult position; losing a week’s salary would cause a hardship for anybody. However, sometimes we need to look at the bigger picture.
The reason I chose to write about this subject was not necessarily to call out the newspaper industry, but to raise awareness of likely future abuses of the unemployment system. Just yesterday, Curries Manufacturing announced that they will be requiring 210 office workers to take a week-long furlough. That is another 210 potential unemployment claims.
The reaction to my newspaper furlough story and the news about Curries Manufacturing got me thinking about a doomsday unemployment scenario.
What would happen if every business in the state decided to furlough their workers for one week? This is a better option than cutting jobs, right? The Bureau of Labor Statistic says that Iowa’s workforce totals 1,592,100 people. And to keep the math simple, let’s say they all apply for unemployment benefits for their furlough week, and their benefit totals $400 per employee.
That means the Unemployment Trust Fund would take a hit of more than $636 million for just that one week. And, it would all be legal and encouraged by Workforce Development.
Such a scenario would wreak havoc on Workforce Development and would be caused by people who still have their jobs. It is likely that, when the furloughed people go back to their jobs (since they are not really unemployed), the Iowans who are truly relying on the unemployment system just to survive might see their benefits be in jeopardy because of the abuses relating to these week-long furloughs.
I have a question for my newspaper friends who defend taking unemployment benefits while on their furloughs. On your week off are you out there looking for a job like you are required to do?
From the workforce development website:
Everyone is required to make a minimum of two in-person work search contacts each week unless otherwise specified by Iowa Workforce Development. You must actively seek work each week you make a claim for benefits, even if you are working part-time. Your job contacts must be made between Sunday and Saturday of the week you are claiming benefits and must be made through in-person contacts with employers. Your work search must be a reasonable and honest effort to find suitable work and you must be willing to accept a reasonable wage in your area for the job for which you are applying. Telephone contacts for jobs are not acceptable. Repeat or follow-up searches may be made to the same employer after six weeks from the initial contact.
You are required to keep a record of your work search contacts. You need to include the date of the contact, company name, address, phone number, and the name of the person you contacted. It is suggested that you keep this record in the space provided at the end of this guide. You are also required to provide a copy of this information on the Work Search History form, upon request.
If requested you may provide a copy of your Record of Work Search rather than copy the information onto the Work Search History form. Failure to make weekly work searches, keep a record of those work searches, and submit the Work Search History form upon request may result in a denial of benefits already paid, causing an overpayment of benefits you will be required to repay.
Are people who know they are going back to work next week really going to go out there and apply for jobs since they already have one? I doubt it. That means hundreds and thousands of fraudulent unemployment claims could be filed.
Companies like Gannett, Lee Newspapers, and Curries need to look no further than the Iowa Judicial Branch to see a reasonable use of furloughs. Instead of week-long furloughs, they furlough their workers on various Fridays and don’t have more than one furlough day per pay period.
This method of furloughing employees lessens the financial blow to the workers and prevents the abuse of the unemployment system that I outlined above. Quite frankly, I would think this would be a better option for newspapers. They could institute sporadic, rolling furloughs rather than having their employees be gone for an entire week at a time.
In difficult times we need to make sure we don’t create undue burdens on the unemployment system. It seems a little odd for me to encourage businesses that are implementing furloughs, or even thinking about it, to follow government’s lead, but in this case, the government is actually providing a good example for Iowa businesses to follow.
blog comments powered by Disqus