President John F. Kennedy wisely observed that the time to repair the roof is when the sun is shining.
For Indiana workers, the sun is shining as brightly as it has in several years, making it the best time to pass a work-sharing bill to allow employers to reduce workers’ hours instead of laying them off during a downturn.
If Indiana doesn’t approve the program this year, in fact, it foolishly forfeits more than $2 million in federal funds offered as an incentive to help set up work-sharing programs and to pay for unemployment benefits. Congress recognized the value when the handful of states with such programs already in place preserved 500,000 jobs during the Great Recession.
Congressman Mike Pence voted for the Middle Class Tax Relief and Job Creation Act of 2012 establishing the incentive program; Governor Mike Pence has declined to participate.
The question is: Why?
The governor’s spokeswoman, Christy Denault, said in an email that the Indiana Department of Workforce Development would be required to administer the partial unemployment benefit created when a worker’s hours are reduced.
While work-sharing programs have been established in other states, there are a number of issues that need to be studied more thoroughly here in Indiana, including long-term administrative cost and the impact on the Unemployment Insurance Trust Fund, she wrote.
Those issues don’t deter the enthusiastic supporters of work-sharing:
The Indiana Chamber of Commerce placed a work-sharing program among its top legislative priorities this year. Mike Ripley, the chamber’s vice president for health policy, said the unemployment trust fund isn’t an issue.
We wouldn’t be promoting this if we believed it threatened the integrity of the unemployment trust fund, said Ripley, a former northeast Indiana legislator. Work-sharing simply makes sense, he observed: Wouldn’t you rather they be working than laid off?
Indiana AFL-CIO supports the plan. Jeff Harris, director of communications and legislative affairs for the union, said results elsewhere have shown the benefits of work-sharing. We don’t like the idea of layoffs, but when they do occur, these workers can continue to receive pension contributions, health care contributions, he said. It keeps their seniority and benefits and keeps them from being fully unemployed and on the street looking for something else. We understand the business’ perspective of keeping skilled workers.
The Indiana Institute for Working Families is a supporter. Derek Thomas, senior policy analyst, points to a Congressional Budget Office finding: The effects of stigma and erosion of skills for the long-term unemployed accounted for half of a percentage point of the current unemployment rate.
House Bill 1338, the legislation to create a work-sharing program, has bipartisan support. Rep. Tom Dermody, R-LaPorte, is the author; Republican Sean Eberhart and Democrats Ed DeLaney and Karlee Macer are co-authors.
It’s tough, in fact, to find anyone who doesn’t like the concept of work-sharing, yet HB 1338 died in the House Employment, Labor and Pensions Committee, reportedly because the governor threatened a veto.
Pence cites job creation as his top priority, but attracting jobs is more costly than retaining them. A work-sharing program might have placed Indiana in a better position to weather the recession and allowed it to focus on other needs. The governor should explain why he was for work-sharing before he was against it.