There is growing concern over unemployment benefits funds for certain states as data suggests they will be out of money to pay unemployment benefits within two years. An article at msnbc.com states that 25 states have already exhausted their unemployment funds and by 2011 around 40 states will be out of funds.
This problem’s most likely solution is to raise payroll taxes but this has been met with opposition by those who believe raising payroll taxes will cause more strain on a weak job market. Employers may be unwilling to hire if they know there will be more taxes involved and, obviously, if employers aren’t hiring it will do little to help the unemployment problem.
Other solutions for the drain on state’s unemployment benefits funds would be to cut back on worker’s benefits but this, again, is met by opposition since those who are employed aren’t willing to give up benefits in the hopes of keeping the unemployment fund alive for those in need.
This raises an interesting question: How will state governments and the federal government solve this problem of paying for unemployment for those who are jobless, yet at the same time open up employment opportunities in the job market that has been unwilling to make a move to expand the workforce?
The current states that have exhausted their unemployment benefits funds are receiving federal aid, but if in two years 40 states are in need there may be nothing to be done. However, with unemployment the only big, vital issues left on the table, 2010 will hopefully bring new signs of life to a stagnate job market.
