No-Fault Unemployment
UNEMPLOYMENT COMPENSATION is a subject with larger philosophic dimensions than, at first glance, you might suspect. What, would you say, are the communityÛªs responsibilities to people who have contributed to their own unemploymentÛÓthe people who were fired for misbehavior or who voluntarily quit? The states have wide latitude in setting their rules, and the District of Columbia is a good deal more generous than either of its neighboring states.</br></br>The question came up last fall, when it developed that two candidates for the city school board were being supported by unemployment insurance while they campaignedÛÓand two incumbent members had been drawing it earlier while they served. The same question comes up again now, because the city is about to raise the payroll tax that pays for this insurance. A number of employers, and the Metropolitan Washington Board of Trade, have been arguing that the city ought to tighten the eligibility requirements.</br></br>Who pays for unemployment insurance? Legally, it's the employers. They are assessed a flat percentage of their payrolls. But an economist would say that most of it is actually paid, indirectly and unconsciously. by the employeesÛÓsince, after all. employers generally look on payroll taxes as wages. Most businesses pass wage costs on to their customers, .which means that an increase in payroll taxes also contributes to inflation and hits consumers. The burden is widely spread throughout the community.</br></br>The number of people drawing benefits at the end of last month was 3.3 percent of the labor force currently covered by unemployment insurance. The rate in Virginia was 2.0 percent; in Maryland, 4.1 percent; and nationwide 4.4 percent. By national standards, the system and its taxes are not particularly onerous around here.</br></br>The rise in the rates in recent years is due mainly to the recession, not to any epidemic of lax administration. But to say that doesnÛªt quite answer the troubling issue of people who walked out of their jobs.