Many Unemployed, Fewer DLT Equals Big Problems

So Governor Chafee has justified the reduction in key staff of the Unemployment Insurance and Workforce Development sectors of the Department of Labor & Training by saying that our economy is improving sufficiently enough to justify the layoffs.

In a June 7th interview with WPRO, the Governor stated:

“Well, the DLT is the opposite of the economy. When the economy is bad they are hiring to deal with the unemployment insurance issues and as the economy stabilized, unfortunately, it goes the other way. They start to layoff those employees that they had to hire during the glut of unemployment insurance requests.”

Realistically speaking, this means a reduction in service center employees from around 90 to around 35. So Rhode Islands’s economy, by gubernatorial logic, has improved over 65%. When did that happen? Where were we? Didn’t 38 Studios just take a flaming nose dive into bankruptcy, crashing into Narragansett Bay in spectacular fashion? Didn’t Blue Cross just let over 40 employees go? Is there a secret, hidden construction boom going on? Is manufacturing on the rise? Does Mr. Chaffee realize that having the second highest levels of unemployment in the country is not worthy of a silver medal? Or is he simply not satisfied until Rhode Island wins first place at something?

Or is it something else?

Changes in Rhode Island laws are a matter of public record, but not often a matter of public knowledge. As of July 1st 2012, Rhode Island Labor Law 28-44-6 has undergone a fairly drastic change that will significantly reduce the means by which unemployment insurance weekly benefit rates are calculated. Without going into the formulaic details of the change, it is enough to say that it will reduce the weekly benefit rate in almost all cases. Come this time next year, the weekly benefit rate reduces again and as of July 1st, 2014, it reduces once more. In a state where over ten percent of claims include out of state wages (primarily due to the small geographic size of RI and it’s proximity to CT and MA), this reduces the incentive for claimants to choose Rhode Island as the state where they would receive a benefit rate most comparable to the income they were receiving prior to layoff.

Maybe. But not necessarily. Previously, Rhode Island was often the obvious choice when given the option to request the combination of out of state and Rhode Island taxed wages because of the generous means by which our weekly benefit rate was calculated. Now it will be comparable in many cases. But not significantly reduced. The more likely incentive will be for businesses who will be able to lay workers off with less of a payroll tax rating percentage increase. Good for “job creators” when they choose to be “job eliminators.”

Another change in the Labor Laws is the means by which a disqualification can be overcome. Previously, if a claimant was determined to be separated from an employer for disqualifying reasons – getting fired for wilfull misconduct or quitting without good cause – one needed only to return to work after the date of disqualifying separation for eight weeks and earn twenty times Rhode Island’s minimum wage for each of those weeks (8X$148) to overcome the prior disqualification and be allowed to collect on subsequent separation from employment. Now one must return to work for at least eight weeks and earn at least his or her weekly benefit rate for the disqualification to be overcome. This will prevent many from being able to collect after a single disqualification, even after redeeming themselves by returning to work and being separated again through no fault of their own.

Rhode Island has the right to know about changes that will affect the safety net of over eleven percent of it’s people. These same citizens also have the right to know that, while these changes – the reduction of key workforce at the DLT, the reduction of benefits, the increase in difficulty of overcoming disqualification of receipt of said benefits – may benefit the few (the job creators who create no jobs), they disenfranchise the many.

These decisions are not math, they are politics and, in spite of the deliberate confusion on the part of many politicians, there is a difference. The workload at the DLT has not reduced. The wait times for incoming calls to the call center have routineley exceeded one hundred minutes over the past few weeks. The back office functions and specialized  are falling far behind and work is piling up. After the two thirds reduction in front-line employees and the eliminations of entire sub-sections of specialization, things will not get more efficient. I will reiterate, this is math. Politics can not change math no matter how hard it tries.

Eleven percent unemployment. Insufficient training for a struggling workforce. Second highest unemployment rate in the country. 65% reduction in front line workforce on the front lines at the Department of Labor & Training. That is the math problem. Solve for X using politics.