Economic group: Miss. can afford higher jobless compensation

Published 7:27 pm Tuesday, May 27, 2008

The director of an independent think tank says he hopes Mississippi lawmakers fulfill a promise to increase the maximum weekly unemployment benefit.

At $210 a week, Mississippi’s jobless compensation is the lowest in the nation. It has been at the same level for nearly six years — and it’s covering even fewer day-to-day expenses now that unleaded gasoline is approaching $4 a gallon and prices are climbing for milk, bread and other grocery staples.

“We think that it needs to be higher, and we think we can afford a higher payment,” said Ed Sivak, director of the Jackson-based Mississippi Economic Policy Center.

Legislators started a special session last week and will return to the Capitol on Tuesday afternoon.

Only a governor can call a special session, and he sets the agenda. Gov. Haley Barbour has asked lawmakers to do several things — the most important of which, he says, is keeping the Mississippi Department of Employment Security alive beyond June 30. MDES handles job placement and training and distributes unemployment benefits to people who have been laid off.

State agencies come up for review every few years, and when MDES came up during the regular session, its reauthorization bill died amid a political spat over all state agencies’ advertising contracts.

The House and Senate last week passed separate bills to keep the employment agency alive, but the two chambers still need to agree on details.

House leaders have dropped their immediate insistence on advertising regulations, saying the issue can be handled — perhaps in more detail — over the next several months.

Barbour’s original plan for the special session did not include consideration of an increase in the unemployment benefit. He added that issue on Thursday, and senators quickly passed a bill to add $15 to the weekly maximum this July 1 and another $10 a year later. The House still needs to vote.

At $235, the Mississippi benefit would reach the current level for the state with the nation’s second-lowest payments — neighboring Alabama.

According to the U.S. Department of Labor, the maximum weekly unemployment benefit is $409 in Arkansas, $275 in Tennessee and $258 in Louisiana.

The Mississippi Economic Policy Center is recommending that lawmakers here increase the rate to $255 a week.

“We didn’t pull $255 out of the air,” Sivak said. “Look at how much the average weekly wage has increased since 2002. It’s up about 20 percent. We’re just looking at replacing wages that people have earned.”

MDES deputy director Lynn Fitch told senators last week that the agency supports the two-tiered increase to reach $235 a week.

Fitch said every $5 weekly increase in the individual benefit would pull between $4 million and $8 million a year out of the unemployment trust fund — the fund paid by businesses’ unemployment insurance. The cost varies, depending on how many people are collecting unemployment.

The trust fund has a balance of about $728 million, and Fitch said it has paid out more than it has collected in the past three years.

Sivak points to U.S. Labor Department figures that show Mississippi has enough money in its trust fund to pay 1.7 years worth of unemployment benefits during a peak recession. That’s triple the national average of 0.52 years and more than double the Southern average of 0.73 years.