1/24/2007 - MMA Weighs in on Unemployment Benefit Bill

[Note: The following is a Letter to the Editor sent by MMA President and CEO Jay C. Moon, CEcD, to Mississippi newspapers Monday, January 22, 2007.] Last Thursday, following the announcement by Alan White Co. that it was shutting down its Shannon plant and laying off 300 employees, Rep. Harvey Moss, D-Corinth, pointed to this local news story when he addressed the state House of Representatives regarding his bill designed to increase unemployment benefits. Yet, instead of asking why this company was leaving the state and what could be done to keep this and other companies from leaving, and thereby how to save jobs, he used the story as an example of why unemployment benefits should be increased. Rep. Moss missed the main point! In a released statement, the company cited “chronic and overwhelming industry pressures,” including price competition, as reasons for the plant closure. Mississippi’s important furniture industry is undergoing severe competition by countries like China. Rather than adding additional burdens to our states employers, we should be focused on helping our businesses compete in the global marketplace. According to a recent study by the National Association of Manufacturers, The Manufacturing Institute and the Manufacturers’ Alliance/MAPI, structural costs for U.S. manufacturers corporate tax rates, employee benefits, legal costs, natural gas prices and pollution abatement have significantly increased since 2003. These escalating costs place our manufacturers at a 31.7 percent cost disadvantage with their competitors in 9 major trading nations, including China. The House voted Thursday, Jan. 18, to hike unemployment benefits, despite concerns about the effect of the increase on the Unemployment Trust Fund and workforce training funds. An amendment to cut the increase in half, which the Mississippi Manufacturers Association (MMA) supported, was defeated. As passed, the bill raises the unemployment maximum weekly benefit amount from the current $210 per week to $230 effective July 1, 2007, and to $250 effective July 1, 2008. Each $5 increase in the weekly benefit costs the Unemployment Trust Fund approximately $8 million, according to the Mississippi Department of Employment Security. The two increases provided for in the bill would cost the employer-funded trust fund more than $64 million annually. This unemployment benefits increase passed the House at a time when business owners statewide are experiencing difficulty finding workers to fill jobs to keep their businesses operating. MMA believes that a reasonable increase is justified, but this increase could be a disincentive to returning to work. It also could damage the Workforce Training Enhancement Fund, which provides approximately $20 million a year from the trust fund for workforce training activities to supplement community college workforce training dollars. Placing additional cost pressure on our employers makes us less competitive and costs Mississippians more jobs. Ensuring training for our state’s workforce is the only way our state’s manufacturers are going to be able to compete globally and keep businesses -- and jobs -- in the state.

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