Legislature(2005 - 2006)BELTZ 211

01/19/2006 01:45 PM LABOR & COMMERCE

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01:52:46 PM Start
01:57:42 PM SB136
02:28:00 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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Heard & Held
<Bill Hearing Postponed>
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                        January 19, 2006                                                                                        
                           1:52 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Con Bunde, Chair                                                                                                        
Senator Ben Stevens                                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Bettye Davis                                                                                                            
MEMBERS ABSENT                                                                                                                
Senator Ralph Seekins, Vice Chair                                                                                               
COMMITTEE CALENDAR                                                                                                            
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 136                                                                                      
"An Act relating to the calculation and payment of unemployment                                                                 
compensation benefits; and providing for an effective date."                                                                    
     HEARD AND HELD                                                                                                             
CS FOR HOUSE BILL NO. 108(FIN) am                                                                                               
"An Act relating to the regulation of water and sewer utilities                                                                 
of political subdivisions that are not in competition with other                                                                
water and sewer utilities; and providing for an effective date."                                                                
     BILL POSTPONED                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 136                                                                                                                  
SHORT TITLE: UNEMPLOYMENT COMPENSATION BENEFITS                                                                                 
SPONSOR(s): SENATOR(s) ELLIS                                                                                                    
03/08/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/08/05       (S)       L&C, FIN                                                                                               
05/01/05       (S)       SPONSOR SUBSTITUTE INTRODUCED-REFERRALS                                                                
05/01/05       (S)       L&C, FIN                                                                                               
01/19/06       (S)       L&C AT 1:45 PM BELTZ 211                                                                               
WITNESS REGISTER                                                                                                              
REPRESENTATIVE HARRY CRAWFORD                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Supported SB 136.                                                                                         
COMMISSIONER GREG O'CLARAY                                                                                                      
Department of Labor & Workforce                                                                                                 
PO Box 21149                                                                                                                    
Juneau, AK 99802-1149                                                                                                           
POSITION STATEMENT: Commented on SB 136.                                                                                      
CRAIG HATELY, Business Agent                                                                                                    
Local 367, Plumbers and Pipefitters                                                                                             
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported SB 136.                                                                                         
RANDY WHITNEY                                                                                                                   
Local 367 Member                                                                                                                
Juneau AK                                                                                                                       
POSITION STATEMENT: Supported SB 136.                                                                                         
ROYCE ROCK                                                                                                                      
Carpenter's Union                                                                                                               
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported the intent,  but not the figures in                                                             
SB 136.                                                                                                                         
DON ETHERIDGE                                                                                                                   
Alaska State AFL-CIO                                                                                                            
8459 Kimberly Street                                                                                                            
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Supported SB 136.                                                                                         
ACTION NARRATIVE                                                                                                              
CHAIR CON  BUNDE called  the Senate  Labor and  Commerce Standing                                                             
Committee meeting to  order at 1:52:46 PM.  Present were Senators                                                             
Ben Stevens, Johnny Ellis and Chair Con Bunde.                                                                                  
           SB 136-UNEMPLOYMENT COMPENSATION BENEFITS                                                                        
CHAIR CON BUNDE announced SB 136 to be up for consideration.                                                                    
SENATOR JOHNNY  ELLIS, sponsor of  SB 136, presented  the sponsor                                                               
statement saying  SB 136 would increase  the maximum unemployment                                                               
benefit from $248  to $300 per week. He said  this increase would                                                               
provide needed  relief to Alaskan  workers who are trying  to put                                                               
dinner on  the table for  their families. In 2004,  Alaska ranked                                                               
49  in the  country for average weekly benefit amount. Alaska has                                                               
fallen  from 47   to  48   in the  past year  for maximum  weekly                                                               
benefit amount.  The average weekly unemployment  check in Alaska                                                               
is $193.91 as opposed to  the national average of $262.50. Alaska                                                               
compares unfavorably  with almost the  rest of the  entire United                                                               
States.  It has  not increased  unemployment benefits  since 1997                                                               
and  this   benefit  is  not  linked   to  inflation.  Increasing                                                               
unemployment benefits is good not  only for workers, but also for                                                               
the economy and  provides the necessary incentive  to insure that                                                               
well-trained  Alaskan workers  stay  here  for future  employment                                                               
REPRESENTATIVE HARRY CRAWFORD  said he supported SB  136 and that                                                               
he had a companion bill to  it that was currently in House Rules.                                                               
Last  year, a  compromise was  suggested to  require 12  weeks of                                                               
waiting for quitting  a job or being fired, but  he convinced its                                                               
proponents to drop  the issue in return for  reducing the maximum                                                               
benefit amount  from $336  to $300. He  explained that  a 12-week                                                               
waiting period in the construction trades would result in:                                                                      
     What  that would  mean in  the  construction trades  is                                                                    
     nobody  would ever  get laid  off again.  We'd all  get                                                                    
     fired  or life  would  be so  miserable,  we'd have  to                                                                    
     quit.  So, it  basically would  mean that  unemployment                                                                    
     insurance wouldn't be available  to the majority of the                                                                    
     people in the  construction trades if we were  to put a                                                                    
     12-week penalty.                                                                                                           
1:57:42 PM                                                                                                                    
CHAIR  BUNDE  asked why  he  assumed  employers would  resort  to                                                               
draconian behavior.                                                                                                             
REPRESENTATIVE  CRAWFORD  replied  that  from  his  35  years  of                                                               
experience, some  contractors do whatever  they can to  cut costs                                                               
because  construction   is  a   very  competitive   business.  He                                                               
     That's  why we've  really reached  a crisis  proportion                                                                    
     here. I  mean we're losing  good trained people  to the                                                                    
     Lower 48  because people can't  afford to stay  here in                                                                    
     the  winter time  or when  the work  gets slack....  We                                                                    
     have cyclical  businesses and that's  what unemployment                                                                    
     insurance  (UI) is  for  - is  to  help people  through                                                                    
     those times when the cycle  is down and they can't find                                                                    
Many people who  normally support him say that a  $300 benefit is                                                               
way too low for them to  support. He's been told it costs $40,000                                                               
to $60,000  to train  an apprentice  ironworker up  to journeyman                                                               
status and Alaska  is losing those folks to the  Lower 48 because                                                               
their hourly scale  and UI benefits are both higher  and the cost                                                               
of living  is no  more expensive  and sometimes  less than  it is                                                               
here in Alaska.                                                                                                                 
CHAIR BUNDE asked  if he thought there should  be any restriction                                                               
on  collecting unemployment  insurance for  people who  are fired                                                               
for cause.                                                                                                                      
REPRESENTATIVE CRAWFORD replied that six  weeks is long enough to                                                               
wait. More than that would result in a slave labor force.                                                                       
CHAIR  BUNDE asked  him  to come  back to  the  committee with  a                                                               
compromise  on  the   firing  for  cause  issue   that  would  be                                                               
acceptable to the other body.                                                                                                   
2:03:47 PM                                                                                                                    
GREG O'CLARAY,  Commissioner, Department  of Labor  and Workforce                                                               
Development  (DOLWD),  underscored  the value  that  UI  payments                                                               
contribute to Alaska's economy.                                                                                                 
2:04:36 PM                                                                                                                    
SENATOR BETTYE DAVIS arrived.                                                                                                   
2:04:43 PM                                                                                                                    
He reported  that UI payments  added $111,149,000 to  the Alaskan                                                               
economy  in 2004.  He pointed  out that  this is  one of  the few                                                               
government  programs  where  employees contribute  a  portion  to                                                               
their paycheck.                                                                                                                 
Alaska is ranked  less than 40th among other  states. Every state                                                               
on  the West  Coast has  higher UI  benefits even  calculating in                                                               
Alaska's dependents' allowance.                                                                                                 
2:07:25 PM                                                                                                                    
SENATOR ELLIS  moved to adopt  CSSB 136, version F.  He explained                                                               
that the CS changes the  effective date. There were no objections                                                               
and it was so ordered.                                                                                                          
COMMISSIONER  O'CLARAY related  that he  is ever  mindful of  the                                                               
challenges to  small businesses in  the state and this  bill does                                                               
not  have  a  major  impact on  employers  according  to  figures                                                               
presented to the committee.                                                                                                     
2:08:58 PM                                                                                                                    
CHAIR  BUNDE commented  that Alaska  doesn't pay  too much  in UI                                                               
benefits, but the program here is  easier to get into and stay on                                                               
than in the Lower 48. He asked if  that is accurate and if he had                                                               
any suggestions for balance.                                                                                                    
COMMISSIONER O'CLARAY replied that he  didn't know how easy it is                                                               
to file a UI claim, because first  of all you have to be jobless,                                                               
which isn't easy  for someone who is trying to  raise a family in                                                               
this state.  It also usually  comes without  a lot of  notice. He                                                               
believed  the department's  appeals  process was  fair and  even-                                                               
handed. The difficulty  he has with criticism  of this particular                                                               
program is that Alaska is  a non-contiguous state. People have to                                                               
board a plane,  jump on a ferry  or drive a long  highway to seek                                                               
other work.                                                                                                                     
He has  been asked  why Alaska has  an unemployment  problem when                                                               
papers in  every major town  in Alaska are advertising  for jobs.                                                               
His answer to that is  that people aren't trained for alternative                                                               
work  and he  has encouraged  a  more targeted  work search  when                                                               
someone  is  unemployed  saying,  "There  is  no  substitute  for                                                               
2:13:06 PM                                                                                                                    
CHAIR BUNDE asked  for suggestions for a compromise  on a maximum                                                               
draw  that might  be  reduced  in exchange  for  a higher  weekly                                                               
COMMISSIONER  O'CLARAY replied  there is  already a  disincentive                                                               
for  someone  to  voluntarily  quit   or  to  be  discharged  for                                                               
misconduct by having to wait  longer and by receiving three times                                                               
less  the weekly  benefit amount.  He added  that he  adjudicates                                                               
that particular point for claimants and employers regularly.                                                                    
2:15:44 PM                                                                                                                    
CRAIG  HATELY, Business  Agent, Plumbers  and Pipefitters,  Local                                                               
367, supported  SB 136  saying that  union members  are routinely                                                               
out of work in the winter and  UI benefits help them put bread on                                                               
the table at that time of year.                                                                                                 
RANDY WHITNEY,  Local 367 member,  supported SB 136,  but thought                                                               
the benefits should  be higher. Investments are  made in training                                                               
apprentices and  those people  leave all  the time  because there                                                               
isn't enough  work here.  He said,  "I don't  see it  as armchair                                                               
money...." Hardly anybody can make it on $300 a week.                                                                           
CHAIR BUNDE asked  him if people get jobs with  other skills when                                                               
they are not able to work in their primary trade.                                                                               
MR. WHITNEY replied  that some have other skills  that don't even                                                               
bother  with unemployment,  but others  would have  to leave  the                                                               
state to get work.                                                                                                              
ROYCE  ROCK,   Carpenter's  Union,  thanked  the   committee  for                                                               
bringing  this bill  forward. He  pointed out  that the  "Trends"                                                               
magazine said in 2002 that Alaska benefits were 39percent  of the                                                               
state's average  weekly wage.  At that  time an  ad hoc  group of                                                               
labor and management agreed on a  figure that started out at $272                                                               
with a  minimum income of $29,750  that the next year  would have                                                               
gone to  $296 with an income  of $32,750. In 2004,  it would have                                                               
gone to  $320 with an income  of at least $35,750.  But this bill                                                               
raises the wage  up to $37,500 to receive the  maximum benefit of                                                               
$300.  So, in  his  eyes the  benefit is  dropping  down to  2003                                                               
levels, but what you have to  make is getting raised to get that.                                                               
He  said, "I  support an  unemployment bill....  This just  isn't                                                               
He pointed  out that the  construction workers average  income is                                                               
$1118 per  week and said,  "It's not  keeping people out  of work                                                               
just because  the money is  so good."  He asked the  committee to                                                               
pass  an unemployment  bill  this session,  but  to increase  the                                                               
weekly benefit. The  UI fund has a  lot of money in  it that gets                                                               
used for  other things and  more of it needs  to get used  for UI                                                               
CHAIR BUNDE commented  that he didn't think someone  would quit a                                                               
job on  which they were  making $1100 a  week so that  they could                                                               
get a $300 a week benefit, but  if they were in that position, he                                                               
thought they may  be less inclined to look for  different work if                                                               
there were  the $300  a week  to fall  back on.  He asked  how he                                                               
thought  people  could  be  encouraged  to  look  for  work  more                                                               
MR.  ROCK  replied that  union  members  would go  through  their                                                               
unions  to  find work,  but  he  didn't  agree with  the  chair's                                                               
philosophy that getting  benefits should be tougher  than what it                                                               
is today. Figures don't indicate abuse  of the system; it is only                                                               
a perception.                                                                                                                   
2:24:49 PM                                                                                                                    
DON ETHERIDGE, Alaska AFL-CIO, supported  SB 136, but also wanted                                                               
to see  additional increases to  the benefits. He  didn't support                                                               
increases to the length of waiting  time to be eligible to draw a                                                               
benefit. He personally knows of people who do take work in the                                                                  
CHAIR BUNDE announced he would hold the bill for a second                                                                       
hearing as is his philosophy.                                                                                                   
CHAIR BUNDE adjourned the meeting at 2:28:00 PM.                                                                              

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