Legislature(2017 - 2018)BARNES 124
03/29/2017 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s) | |
| HB126 | |
| HB142 | |
| HB103 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 142 | TELECONFERENCED | |
| + | HB 126 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 103 | TELECONFERENCED | |
HB 142-UNEMPLOYMENT COMPENSATION BENEFITS
3:42:27 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 142. "An Act relating to unemployment insurance
benefits; increasing the maximum weekly unemployment insurance
benefit rate; and providing for an effective date."
3:42:36 PM
REPRESENTATIVE TUCK described HB 142 by stating that it relates
to the effectiveness of Alaska's Unemployment Insurance (UI)
program. He continued as follows:
The national unemployment insurance program was
initially created in 1935 by the Social Security Act.
Congress chose to create a national system of
compensation for unemployed workers based on an
insurance model rather than an entitlement program.
This insurance model has worked well for over 80
years. As with any other insurance program, the
objective is to underwrite and identify potential loss
incurred by a small percentage of the insured through
accumulation of funds collected from the group as a
whole. The loss insured by the program is the loss of
wages by unemployed workers. The premiums required to
cover this potential loss are in most states paid
solely by the employer; although in Alaska the cost is
shared by the employer and the worker. We are one of
three states in the nation that does this. Alaskan
employers carry 73 percent of the direct cost and the
workers pay 27 percent of these costs through payroll
taxes.
REPRESENTATIVE TUCK stated that as with any program that
compensates individuals while they are not working, there may be
concerns about providing a disincentive for returning to work.
He said, "In striving to provide sufficient temporary income to
enable workers to bridge the gap between jobs while meeting non-
deferrable expenses without that disincentive, the U.S.
Department of Labor encourages a target of 50 percent wage
replacement to try to balance that out." He explained that wage
replacement measures the state's average weekly benefit amount
as a percent of the average weekly wage. According to the most
recent figures published by the U.S. Department of Labor, Alaska
ranks last in wage replacement at 28.8 percent, forty-fourth in
the nation in terms of the average weekly benefit paid to
unemployed workers - $252 per week, and 39th in the nation in
terms of the maximum weekly benefit amount of $370 per week.
Benefit amounts are based on the amount of wages a worker earns
during a prescribed base period. Workers with higher earnings
whose loss of work has a higher financial impact can receive a
higher benefit amount. Representative Tuck related that under
Alaska's current statute, the maximum benefit amount that can be
paid to workers who have earned $42,000 or more is $370 per
week, regardless whether the amount of wages lost was $42,000 or
$100,000 or $200,000 per year. The current maximum weekly
benefit amount represents approximately 36 percent of the
average weekly wage of $1,020 in Alaska. The proposed
legislation seeks to raise the maximum weekly benefit amount in
Alaska to an amount that is roughly one-half the average weekly
rate in the state for 2017, up to $510 per week effective
January 1, 2018.
REPRESENTATIVE TUCK stated that the second intent of the
proposed bill is to tie future increases to the maximum weekly
benefit amount to a percentage of the average weekly wage, as is
the case in 36 other states. This would allow the wage
replacement offered by the program to rise based on the
relationship to the wages that are being replaced. He said the
estimated cost to employers, for each employee earning the full
taxable wage base of approximately $38,000, would increase
gradually beginning in 2019 [until it reaches] an additional
$233 per employee in 2023. He indicated this is over the
baseline forecast, and the proposed bill would not increase the
minimum wage benefit assessment. The estimated additional cost
to employees earning the full taxable wage base in 2023 will be
$31 over the baseline forecast. Representative Tuck advised
that after December 31, 2019, the maximum weekly benefit amount
would be calculated each year based on 50 percent of the average
weekly wage in the state. He said tying future increases to
increases in the average weekly wage over time would result in a
less dramatic change to employer taxes than what the state has
experienced in the past when the maximum benefit amount remained
static and became less and less adequate over time, as it has
since the last increase in 2009.
3:47:22 PM
REPRESENTATIVE BIRCH said he had a number of letters of
opposition from individuals concerned about the impact that this
additional cost increment will have on small businesses during a
time of economic challenge and recession. He asked what the
actual cost would be to elevate this benefit.
3:47:57 PM
REPRESENTATIVE TUCK said the estimated cost to employers for
each employee earning the full taxable wage base of
approximately $38,000 will increase gradually and be an
additional $233 per employee by the year 2023.
REPRESENTATIVE BIRCH asked if it would be $233 per employee per
year.
REPRESENTATIVE TUCK said yes, that it would be $233 per employee
once it reaches its full maximum in 2023.
REPRESENTATIVE BIRCH pointed out that the bill refers to base
period wages and a weekly benefit amount, and he asked for
clarification on the duration of a base period.
REPRESENTATIVE TUCK said that he believed it is the qualifying
period for someone to receive UI benefits and that it is a
period of one year.
REPRESENTATIVE BIRCH, referring to the table in HB 142, asked if
someone with a base period of $2,500 to $2,700 per year would
then be entitled to a $56 per week benefit.
REPRESENTATIVE TUCK answered yes. He said that for every $250
increase in annual base period wages, the weekly benefit
increases $2. However, again referring to the table in the
bill, he pointed out that HB 142 would not change UI benefits
for those at lower incomes. He said the change HB 142 brings to
the current statute is that of an increase in the weekly benefit
for those at higher income levels, and this could be seen on
page 7 of the bill. He said that HB 142 would allow for those
who earn more and have contributed more to the insurance program
to be able to receive a larger proportion of their annual pay
than what they would receive now. It would also bring benefits
closer to the recommended average of the U.S. Department of
Labor, as well as making Alaska current with 36 other states in
the country. Representative Tuck said Alaska has more seasonal
workers than any other state in the country, citing the seasonal
industries of fishing, tourism, and construction, as well as the
labor that occurs on the North Slope and in mining. He stated,
"We want to make sure that families are able to weather out some
of those ... tough economic times ...."
3:51:05 PM
REPRESENTATIVE BIRCH, referencing page 8 of the bill, asked what
the duration of a benefit would be in the case of a fisherman
working three months and earning $50,000 annually, with a
corresponding benefit of approximately $20,000.
REPRESENTATIVE TUCK requested to bring Ed Flanagan of the
Department of Labor and Workforce Development to the discussion
to explain the number of weeks someone would be qualified to
receive a benefit.
3:51:59 PM
ED FLANAGAN, Director, Central Office, Division of Employment &
Training Services, Department of Labor & Workforce Development
(DLWD), responding to the question from Representative Birch,
said fishermen are not covered under UI. He added that the
maximum benefit for a seafood processing worker would be 26
weeks. He also said that in the past, a claim could be extended
under a federal extended benefit program, which would add up to
an additional 13 weeks of benefits. In the 1980s, the program
was changed to address claims from workers with earnings that
occurred in only one quarter. Mr. Flanagan offered his
understanding that at least 10 percent of earnings occur in a
second quarter. In addition, there is "a differential ratio"
utilized to determine the length of the benefit period based on
how well earnings were distributed over the entire year. He
said that earnings occurring in just two quarters would result
in a maximum benefit period of 18 weeks rather than 26 weeks.
REPRESENTATIVE BIRCH said the concern voiced to him was that of
the cost impact on an employer and "certainly not a reflection
on the individuals involved." He also said he wasn't aware of
the mechanics of the system, for example, how it would prevent a
situation where someone could work for only three months and
then "basically kick back for nine months."
MR. FLANAGAN said that such a situation was not possible and
that he would not presume to tell an employer at any time, let
alone in troubled times, that $233 per employee five years out
is not something they should be concerned about. However, he
would encourage employers to think about how UI benefits support
many communities, especially those that have strong seasonal
workforces. He noted that he feels we lost something when we
went away from paper payroll checks, as people would cash those
checks after hours at a time when there were limited banking and
credit card options. He summarized by saying he thinks there
are employers that understand UI benefits not only help the
worker but also insure the community.
3:54:25 PM
REPRESENTATIVE JOSEPHSON asked Representative Tuck to explain
his earlier statement, which indicated Alaska is one of only
three states that does or does not "do something."
REPRESENTATIVE TUCK responded that Alaska is one of only three
states where employees contribute to their unemployment
insurance program.
REPRESENTATIVE JOSEPHSON then made the point that in addition to
Alaska's [UI benefit] rates not being anything close to a
livable wage, the state is one of only three that require
employees to contribute to their UI program.
REPRESENTATIVE TUCK added that he did not recall the names of
the three other states, but that of the three, Alaska has
employee contribution rates that are significantly greater.
REPRESENTATIVE JOSEPHSON asked why the sponsor of the bill did
not want to [increase] the lower wage earner's rates.
3:55:24 PM
REPRESENTATIVE TUCK said that the bill was focused on providing
UI benefits to higher income wage earners and, in doing so,
balancing the increase in benefits with the associated
additional cost to the employee. He emphasized his concern that
Alaska retain skilled workers and support industry and
employers, while sharing the burden "on both sides."
3:56:15 PM
REPRESENTATIVE WOOL asked if the annual salary is calculated
based on a weekly salary extrapolated over 52 weeks.
3:56:25 PM
MR. FLANNAGAN answered no; it is based on actual earnings during
the base period. He gave the example that if someone filed a
new claim this week, then all the wages for the period October
1, 2015, to September 30, 2016, would be considered. If a claim
was filed next week, when it would be a new quarter, the
earnings period would be the calendar year 2016. He said there
is no averaging or smoothing; and that it is the actual earnings
that are utilized.
REPRESENTATIVE WOOL said that the reason he asked was because he
knows that some people work seasonally and [become unemployed]
following a season of high earnings, and he wanted to confirm
that someone who, for example, earned $1,000 per week for 3
months (for a total of $12,000) would fall under the $12,000
category and not the $48,000 or $52,000 category.
MR. FLANNAGAN stated that's correct.
REPRESENTATIVE WOOL asked for confirmation that under his prior
example, the UI benefit would be $132 per week, even though
earnings were $1,000 per week for one quarter.
MR. FLANAGAN stated that this is correct. He added that if the
beneficiary had dependents, then he/she would be eligible for an
additional $24 per week for up to three children.
3:58:15 PM
REPRESENTATIVE SULLIVAN-LEONARD pointed out that the existing
statute describes the eligible individual, and then asked how a
benefit is calculated for a family.
MR. FLANAGAN stated unemployment insurance is based strictly on
the individual, with the possibility of a dependent child
allowance of $24 per child to maximum of three. He said that
this has been in statute for some time. He added that there is
no measure in any system nationwide regarding family income.
REPRESENTATIVE SULLIVAN-LEONARD asked what the fiscal note might
be, noting that it was shown as zero.
MR. FLANAGAN said that the fiscal note reflects the agency cost,
and in this case, it is de minimis, if calculable. He indicated
that a change in benefit amount does not change the cost to the
agency. He said if Representative Sullivan-Leonard was asking
for the cost to individuals or businesses, it was his
understanding that this was never reflected in the fiscal note.
3:59:58 PM
REPRESENTATIVE SULLIVAN-LEONARD asked if there was a way to
quantify what the financial impact is going to be, not only to
the department but also what the benefits would show for the
individual as well as for one, two, or three children. She
asked if there was a way to calculate what it would be annually.
MR. FLANAGAN said he could provide the agency's annual
projections on what it expects to pay. He said the benefits
paid out have never been considered relevant to the fiscal note.
REPRESENTATIVE SULLIVAN-LEONARD said that she was looking for
those dollar amounts, especially since there is a request to
increase the unemployment insurance for both the employee and
the employer.
MR. FLANAGAN said it was those dollar amounts that were used to
come up with the estimates for 2022 for additional cost versus
"doing nothing." He said that they have run those numbers to
figure out a "phasing up" over five years to an additional $233
per employee for the employer. He noted that this was for
employees making the $38,000 or $39,000 taxable wage base. The
employer's and the employee's contributions stop there. For the
employee it is an additional $31 per year. These are determined
from the estimate of the change in the benefits that will be
paid. He said the agency can provide this information.
4:02:08 PM
REPRESENTATIVE BIRCH pointed out that HB 142 would create a
second, and therefore additional, increase under the UI program,
as there was an earlier bill that established training as a
benefit. He then asked if there are any other existing parts or
if we would see any other new additions to the UI program.
4:03:08 PM
MR. FLANAGAN said that he was not aware of any others or
proposals for any others. He said that the two training
programs Representative Birch was referring to are the State
Training and Employment Program (STEP) and the Technical and
Vocational Education Program (TVEP). He stated that in the
past, he had misunderstood these programs by thinking
incorrectly that because there is a diversion from the employee
share, it is an additional cost to the employee. He explained
that the cost of the program is determined on a 73 percent
employer/27 percent employee split, and it is after that split
that the diversion is made. He said that employees don't pay
more except over time in the long run, because some money is not
coming out of the trust fund that otherwise would. He said he
could provide even more detailed information if requested, as he
had a staff member from research and analysis on hand.
CHAIR KITO said additional information would not be necessary as
the issue was not related to the bill.
4:04:10 PM
REPRESENTATIVE KNOPP directed attention to Section 2, on page 9
of HB 142, and asked what the maximum benefit would be for an
individual that makes $100,000 per year.
4:04:39 PM
REPRESENTATIVE TUCK offered his understanding that the maximum
benefit would be $510, because the benefits "max out" at a base
income of $59,500. However, he pointed out that Section 2 is
"kind of a self-evaluating factor" that he mentioned earlier,
which would allow the unemployment benefit to update itself
based on 50 percent of the average income.
4:05:17 PM
MR. FLANAGAN clarified that the current weekly benefit is $370,
and under the proposed bill it would increase to $510. He added
that "at the lower end it's much closer to 50 percent than it
is, because it starts at that $2,500, with a benefit amount."
He explained that currently an unemployed worker who made
$42,000 in his/her base year receives the same benefit as a laid
off worker making $84,000. Both workers would have contributed
the same amount, "because $39,000 is where it cuts off for
contributions." He said that the benefits are "out of whack,"
because the person with the higher income is going to have
higher expenditures.
REPRESENTATIVE KNOPP said that his interpretation of Section 2
was that the maximum benefit of $510 would increase at a rate of
$2 for every $250 increase in earnings greater than $59,500. He
provided a hypothetical example of an individual earning
$100,000 and asked if his maximum benefit calculation of $834
for the individual (based on the language in Section 2) was
correct.
4:06:50 PM
MR. FLANAGAN said that he understood how Section 2 might be
interpreted in that way; however, the annual income of $59,500
is a cap, and income greater than $59,500 is not considered. He
explained that Section 2 would provide an adjustment to the
benefit schedule by; extending it out beyond $59,500 if the
average annual wage for the state increases. He added that he
does not expect any adjustments in the schedule to reach
$100,000 in his lifetime. He again acknowledged that this was a
confusing element of the bill.
REPRESENTATIVE KNOPP reiterated his interpretation that Section
2 states that weekly benefits would increase based on an
"individual's base period wages," not based on changes in "state
wages on an average."
MR. FLANAGAN reemphasized that no one would receive a benefit
greater than that listed for an income of $59,500; in subsequent
years, if the average annual wage went up, say $4,000, then
"they would use that column on the left to calculate a benefit
which would go up another $2,000 total in the year."
4:08:35 PM
REPRESENTATIVE WOOL brought attention to the language [in
Section 2], to which Mr. Flanagan and Representative Knopp had
referred, was on Page 9, Line 25, and read: "the department
shall determine the average annual wage paid to employees". He
then asked for confirmation that this referred to the "overall
state average" and not individual wage.
MR. FLANAGAN answered that's correct. He said the department
[reviews the average annual wage], which currently is $53,000.
The taxable wage base is three-fourths of the average annual
wage.
4:09:19 PM
REPRESENTATIVE TUCK brought the committee's attention to
language in [Section 2], subsections (j) and (h), and he noted
that the language in subsection (h), [on page 9], lines 15-17,
refers to the ["average annual wage"] mentioned in subsection
(j).
4:09:49 PM
REPRESENTATIVE WOOL asked for confirmation of his understanding
of the issue by providing an example where the average wage is
$52,000 or $1,000 per week. He then asked if, in this
situation, benefits under this section may not exceed 50 percent
of $1,000 per week or a $500 weekly benefit.
MR. FLANAGAN answered that is correct.
4:10:23 PM
CHAIR KITO asked if Mr. Flanagan had any further comment.
MR FLANAGAN stated that he would be available for questions. He
added, "It hasn't been done since 2009 ..., and it is past due."
4:11:11 PM
CHAIR KITO opened public testimony on HB 142.
4:11:29 PM
AARON PLIKAT, President, Building and Construction Trades
Council of Southcentral Alaska, introduced himself as the
business agent for Plumbers and Steamfitters, Local 367 and the
president of the Building and Construction Trades Council of
Southcentral Alaska. He stated that as the son of a journeyman
pipefitter and someone who has been in the trade for 22 years,
he is knowledgeable about being out of work. He said he can
tell firsthand about the pride a worker feels when completing a
project, as well as the fear of the impending layoff that
follows project completion. He said construction has always
been a path of peaks and valleys; when it's good, it's
fantastic, and when it's bad, the span between projects can be
months or even longer. As a business agent, he spoke about the
highly skilled craftsmen that are more than willing to perform
their crafts anywhere under any circumstances. These workers
and all workers should take some comfort in the fact that there
is a benefit for their short-term security should their
employment end suddenly or otherwise.
MR. PLIKAT said the current benefit is one of the lowest in the
country and has not been adjusted since 2008. He said the cost
of living is increasing in Alaska. He stated support for an
adjustment of the state's unemployment insurance from the
current weekly maximum benefit of $370 to the proposed $510,
because doing so will assist workers by allowing them the time
to find long term quality employment again. He strongly
encouraged the committee to support HB 142.
4:13:32 PM
DOUG TANSY introduced himself as a person wearing multiple hats:
current president of the Fairbanks Central Labor Council; member
of the Alaska Workforce Investment Board; and member of the
Fairbanks Building and Construction Trades Council. He opined
that wage (indisc.) unemployed or underemployed is critical
because of the high rate of seasonal employment here in Alaska.
He is a construction electrician who served his apprenticeship
in Fairbanks and he has experienced UI benefits first hand. He
is now a member of his local apprenticeship committee, which
oversees the school and the apprentices while they are in the
program.
MR. TANSY said the school has invested close to $50,000 in each
apprentice by the time each completes the program. The benefits
of the program are having journeyman-level workers available to
safely and efficiently do high-quality jobs for contractors and
to train the next batch of apprentices that are coming up behind
them. He said that with low UI wage replacement there is a
stress on individuals and families, and sometimes the way out of
that stress is to look for employment opportunities in
Washington, Oregon, and California. He said that when this
occurs, a percentage of those who leave the state don't come
back home, which results in a loss on our investment, a loss on
the investment of contractors, and a diminishment of a ready
workforce. This scenario is a typical setting for all
construction trades, not only the mechanical trades. Mr. Tansy
said the outward migration during leaner times doesn't cause
only financial impact to families; he has seen it contribute to
divorce or stress for children who must move to different
schools and not have in place the things that are conducive to
their development. He strongly encouraged movement of the
proposed legislation. He noted that the groups he mentioned
today have passed resolutions in support of HB 142.
4:16:48 PM
BRANDON MCGUIRE expressed his support for the bill and provided
an example of how it supports the working class, which not only
helps drive the local economy but also the economy of the
nation. He said that he has a typically employed friend that is
a construction worker with the laborers union. The friend and
his wife are expecting a child later this year and, as a
seasonal construction worker, Mr. McGuire's friend stands a
chance of being unemployed in and around the birth of his child.
He noted that in a situation like this, "when Murphy's Law rears
its head, every little thing helps."
MR. MCGUIRE said he knows that when a person is laid off, after
working for 1.5 years on a long project, unemployment checks
don't cover the bills. He said Alaska is such a great state,
yet it's UI benefits are low compared to those of other states
in the country. Given this, he said he doesn't see how a bill
like this could see any opposition, and he hopes that it will
not. He opined that Alaska should lead the way in support of
its working-class citizens.
4:19:03 PM
RALPH KIBBY, Owner, Chatham Electric Inc, stated that Chatham
Electric Inc is a statewide electrical contractor that works
primarily in Southeast Alaska. He stated that his business
provides the first response for many communities in Southeast
Alaska and other areas, for power outages and emergencies. He
said his company hires highly skilled workers, and he asked the
committee to pass HB 142 to retain that highly skilled work
force. He expressed concerned about workers leaving the state
because their needs are not being met. He said contractors
spend hundreds of thousands of dollars training their employees
regardless of the five-year period required to become a
journeyman. At this point, he said, whatever can be done to
maintain a skilled workforce - "our brain-trust" - is going to
help Chatham Electric Inc stay in business.
4:20:42 PM
WALTER ROBINSON, International Brotherhood of Electrical Workers
(IBEW), stated that he feels the past and current UI weekly
benefit amount in Alaska is far too low. Alaska's average
weekly benefit amount ranks forty-fourth nationally, yet the
state has one of the highest costs of living. Having personally
drawn UI benefits himself, he can attest to the fact that a $370
weekly benefit is not enough. With this amount of money, it is
hard to maintain a household and put food on the table with two
kids and a wife to support. Alaska is not a cheap state to live
in because of the cost of housing, food, electricity, and heat.
Under the current price of oil and state of the economy, he
said, jobs are decreasing, and unemployment is increasing.
Alaskans are going to need help in this recession to get through
hard times.
MR. ROBINSON said that he feels the proposed increase comes at
the perfect time to ensure Alaskans will remain in the state.
People on UI benefits spend money in the state; therefore,
increasing the maximum weekly benefit will put more money into
the economy and help the business community. He stated that
people do not want to be on unemployment insurance as it is
stressful not having a job while trying to pay the bills and put
food on the table. The proposed legislation bill would relieve
some of the hardship placed on Alaskans during the current
recession and unemployment. Mr. Robinson stated that he is a
proud Alaskan but feels rating forty-fourth in the nation for UI
benefits is not something he is proud of. He urged the
committee to move HB 142 and help Alaskans that are suffering.
4:22:50 PM
LAKE WILLIAMS, District Representative, International Union of
Operating Engineers (IUOE), Local 302; President, Fairbanks
Building and Construction Trades Council, stated that on March
15 the council passed a resolution in support of HB 142, urging
the House to pass the bill and for the Senate to take action.
He said he would submit that resolution into the record.
MR. WILLIAMS said as an apprentice he relied on UI benefits
while he was in school to help pay bills, and when he was a
journeyman he relied on them until the next job came along. He
pointed out that work has slowed, with smaller capital budgets
and a reduction of work on the North Slope. He said that often
employers are struggling to maintain their workforce; while a
lot of them will find things for workers to do, they are forced
to lay people off and then hope that this skilled workforce will
not leave the state. He said that this is a constant battle for
employers; they are always worried about losing skilled workers.
He said that [employers] are seeing more and more people "raise
the white flag" and move out of state when they cannot find work
or pay their bills. Some of them come back and then are
referred to as "out-of-state workers." He said that it's hard
to blame these people as they are going places where it is
cheaper to live, but they are taking their money with them. Any
little bit [the state] can do to help workers and contractors,
maintain a workforce, and assist local families in getting by
until the next job comes around is a smart thing to do. He
reiterated his support for HB 142 and urged the committee to
pass it.
4:25:02 PM
BRONSON FRYE, Recording Secretary, South Central Alaska Building
Trades Council, stated that he is a business representative for
the Painters Union and is at the meeting to testify in his role
as the Recording Secretary of the Building and Construction
Trades Council of Southcentral Alaska. He said he is in favor
HB 142 and, while many reasons for supporting it have been
already articulated, he thinks it is notable that UI benefits
have not been raised since 2009 and that the state's maximum
weekly benefit amount ranks thirty-ninth in the country. He
pointed out that the U.S. Department of Labor recommends a 50
percent wage replacement and that HB 142 would meet that
recommendation, increasing the benefit from the current maximum
benefit of $370 to a maximum of $510. He said he believes that
it is also noteworthy that the State of Washington's current
maximum weekly benefit is $681, almost double our $370 benefit.
A benefit of $510 would bring Alaska much closer to other states
in the Pacific Northwest.
MR. FRYE opined that when workers lose their job, it is a loss
to not only the individual but to the entire community; having
adequate unemployment insurance benefits lessens that negative
impact. He pointed out that Alaska is seeing a downturn in its
economy and that if all the skilled workers must move Outside
for work and stay there, then the state loses a major investment
in time, money, training, and development of assets productive
to Alaska. He warned against a situation in which the economy
improves and Alaska finds itself with a shortage of workers. He
indicated that [helping workers] "stay afloat" and stay in
Alaska is a wise investment. In conclusion, he encouraged the
passage of HB 142.
4:27:40 PM
PAUL GROSSI stated that he was representing the Alaska State
Pipe Trades. He stated that [the Alaska State Pipe Trades]
support HB 142, as it will help unemployed workers. He said
that he was hearing a lot of resistance about the proposed bill,
based it not being the appropriate time to increase the benefit
because there is a downturn in the economy. He provided two
reasons why he thinks this is the "exact time" to increase the
benefit: to help unemployed workers and to help businesses that
rely on the workers as customers. He said that although the UI
benefit would not replace the wages earned during employment,
the lower income would provide some help to both the workers and
the businesses.
MR. GROSSI said he is probably the only one in the room old
enough to remember the last recession. He said that he was
living in Anchorage at the time, and the recession was "really
terrible"; it affected him personally. He described people
having to leave their homes and condos, with their furniture
left behind. He also described families leaving the state with
only their suitcases, after driving down to the Department of
Labor to pick up their checks. He said that the bill was "not a
cure for that" but would help to create a softer landing. He
finished by urging the committee to pass HB 142.
4:30:09 PM
REPRESENTATIVE KNOPP ventured that Mr. Grossi was referring to
the recession in '85, '86, and '87.
4:30:27 PM
REPRESENTATIVE BIRCH remarked there had been a lot of testimony
about the job losses that are occurring and discussion on
whether Alaska is or is not in a recession. He stated that from
a budget standpoint, Alaska has issues to deal with at the state
level and "some of us would like to see the state budget track
the private budget" if there is "a contraction." He then asked
if benefits are taxable as income.
MR. GROSSI replied that he could not remember for certain but
thinks they are taxable.
4:31:24 PM
REPRESENTATIVE WOOL said that he shares the concerns of most of
the people testifying and, along with Mr. Grossi, is concerned
that laid off workers will go to other parts of the country and
that some of them will not come back to Alaska. He said that he
is not sure the $200 increase in weekly benefits that the bill
would provide would be sufficient to keep a worker here when
they could make "decent money" [elsewhere]. He indicated that
it would be helpful if the provision under HB 142 kept people
here a little longer. He ventured that the real solution is
getting the economy back on line to ensure future jobs.
MR. GROSSI responded, "The only real solution is a job." He
said he hopes Alaska would not again experience a recession as
bad as the one in the mid-1980s, in Anchorage, which he
characterized as "pretty terrible" and "like the Grapes of
Wrath." He said that he didn't know if [HB 142] was enough, but
he thinks it's worth a try, as it may cause a "softer landing"
and help not only individuals but businesses as well. He
pointed out that while individuals can leave to find work,
businesses will close and, as a result, will be gone. He said
that there were a lot of businesses in the 1980s that closed
because they did not have the customers to stay open.
4:33:40 PM
REPRESENTATIVE WOOL added that training through the TVEP
program, which is covered under the UI program, was also
available.
4:34:16 PM
CHAIR KITO announced that HB 142 was held over.