BILL MINOR: Mississippians lose millions with refusal of stimulus funds

JACKSON – Anyone who thinks jobs are soon coming back in Mississippi is whistling Dixie. State economic research just out shows that the jobless rate for blacks will hit 17.4 percent and 10 percent overall by the end of this year.
More bad news on the job front is that our own state leadership is balking at accepting federal stimulus money that would lessen the hardship of Mississippians out-of-work or having severe cutbacks in their work weeks. These latter ones will suffer the brunt of Gov. Haley Barbour’s refusal to let lawmakers make slight reforms in state unemployment insurance laws so the state can qualify for $56.1 million in stimulus benefits.
As a result, two employment study groups say, hard-hit communities in Mississippi will be denied $120.6 million in economic activity and 39,600 workers who could be eligible for unemployment insurance benefits will be adversely affected.
Since more Mississippi blacks than whites stand to be either unemployed or underemployed before expected economic recovery reaches the state in 2014, the case could be made that Barbour’s rejection of funds from the federal stimulus package for workforce relief has an undertone of racial discrimination.
Certainly Barbour, who is said to be considering a presidential bid in 2012, wouldn’t want it known nationally that he blocked available federal stimulus money which would have helped jobless low-income African-Americans in the nation’s poorest state during this deep recession. Already, the state’s average unemployment benefits are the nation’s lowest.
The unemployment forecast is made by economist Dr. Marianne Hill in the June issue of the Mississippi Economic Review produced by the Center for Policy Research in the state Institutions of Higher Learning Board.
Three areas explored
Her article explores three areas of how small reforms in the state’s unemployment system can open options to qualify for federal funds under the American Recovery and Reinvestment Act (ARRA), a key measure in President Obama’s economic stimulus package. She points out that even before enactment of ARRA, Congress had considered similar provisions to modernize the unemployment insurance systems administered by states.
Barbour has complained about possible “strings” that the federal government may attach if he complies with ARRA’s stipulations. But his primary hang-up is that extending jobless benefits to part-time employees (many states, including neighboring Louisiana, already do it) could cause the state to raise payroll taxes on businesses to bolster the state’s unemployment trust fund.
Actually, according to the non-profit National Employment Law Project in Washington and the Mississippi Economic Policy Center, Barbour’s objections are off-base. They say ARRA’s provisions are very clear cut, with no “strings,” and that Mississippi is one of a few states which would get extra federal funding for four years to offset any additional cost to the state if part-time workers are covered. By then, Barbour would be out of office, and the jobless emergency would in all likelihood be over.
Ed Sivak, director of the privately-funded MEPC, made the estimate that local communities would be deprived of $120.6 million in economic activity if the state fails to qualify for stimulus benefits by adopting reforms, especially an “alternative employment base period” for workers to be eligible for UI benefits. He said the economic impact on communities was based on studies showing that every additional $1 in UI benefits generates $2.13 in economic growth.
Bypass mechanism
The Obama Administration’s stimulus package provided that legislatures by resolution could bypass failure of a governor to accept recovery funds so that the state could have access to the state’s allocation. In March, the Mississippi House adopted a joint compliance resolution and sent it to the Senate. However, it was bottled up without action in the Republican-controlled Senate Rules Committee.
It’s virtually certain Barbour will not include such a measure in his upcoming special session agenda. Resolutions, however, are exempt from special session calls and it is technically possible to revive the compliance resolution.
As Dr. Hill points out in her June Economic Review, “the decision regarding reform of the unemployment system is becoming critical.” She adds, “As unemployment approaches 10 percent it is time to ask: would the benefits of expanded coverage outweigh the cost?”
Bill Minor is a syndicated columnist who has covered Mississippi politics since 1947. His address is Box 1243, Jackson, MS 39215. Send e-mails to Minor through edinman@earthlink.net.

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