N.C. Likely Won't Join Other States in Major Expansion of Unemployment Insurance

The National Association of Manufacturers and the U.S. Chamber of Commerce are promising an all-out court battle to block the new regulation, which is a major expansion of the 1993 Family and Medical Leave Act. FMLA already provides workers with 12 weeks of unpaid leave from the jobs after a birth or adoption in the family.

The U.S. Chamber said it's “one of the most ludicrous proposals to emerge in years” to use unemployment insurance money to pay workers to stay home after a birth or adoption. "If there ever was a case of robbing Peter to pay Paul, this is it,” said Patrick Cleary, NAM vice president for human resources policy. “Under the guise of helping working families, the Clinton Administration is raiding the unemployment trust fund that serves as a safety net for unemployed workers so he can score political points during a booming economy," Cleary added.

NCCBI is the state affiliate of both the NAM and the U.S. Chamber.

Business groups estimate extending paid leave for births and adoptions would drain as much as $14 billion a year out of state unemployment insurance trusts funds if all 50 states participated. The U.S. Labor Department estimates it would cost just $196 million if only the 15 states that so far have expressed interest participate.

The 15 states that have indicated they will participate in the program are California, Florida and those in the industrial Northeast.

David Clegg, deputy commissioner of the N.C. Employment Security Commission, said he had talked informally with the seven ESC commissioners and heard little interest from them in participating in what's called the BAA-UI program (for Births And Adoptions, Unemployment Insurance). He said it was possible that a formal vote by the full commission on the issue could come during the commission's scheduled June 29 meeting. “I haven't perceived any sentiment that they (ESC commissioners) want to get involved,” Clegg said.

Clegg also pointed out that, even if the ESC commission voted to participate in BAA-UI, it would require approval from the General Assembly before the ESC could proceed.

“North Carolina has historically been at the forefront of unemployment insurance social issues,” Clegg said. He noted that the state, which provides the highest unemployment insurance weekly benefit in the Southeast, has a provision which allows workers to receive unemployment benefits if they miss work as the result of domestic violence. North Carolina also has a provision which allows for the payment of benefits if a worker has to change the shifts he or she works and the change causes problems with child care.

“We feel that we have taken the lead nationally and have addressed issues such as this,” Clegg said. “This has not been one of them.”

Clegg said there is a concern that BAA-UI would imperil the solvency of North Carolina's unemployment insurance trust fund, which now stands at $1.2 billion. “That sounds like an incredible amount of money, but with the growth of North Carolina's labor market, if we were to experience a recession like we had in the late `80s and early `90s, that $1.2 billion would last us about 18 months.”

The NAM's Cleary said the idea is a radical change in the whole concept of unemployment insurance. "Unemployment insurance isn't for people who have jobs; it should be reserved for the unemployed, particularly in light of the Department of Labor's disclosure that, even today, some 25 states currently have insufficient unemployment insurance reserves,” he said.

"While it is our view that the Clinton Administration's so-called `Baby UI' proposal violates both the Federal Unemployment Tax Act and the Family and Medical Leave Act, at the very least it is back-door rulemaking at its worst,” Cleary concluded.

Pay Gap Narrows Between Men and Women
Women still aren't paid as much as men who work in the same job, but the gap is narrowing, the U.S. Department of Labor said in a report. Women's earnings as a percent of men's earnings have risen from 62.5 percent in 1979 to 76.5 percent in 1999, the report said. The pay gap is worse for black and Hispanic women whose earnings have grown very little.

More women are working in occupations that pay well, but even within those occupations they still make less than men. In each of the top 10 occupations with the highest earnings for women (chart, right), there is at least a 9.5 percent pay gap.

However, the overall condition of the American worker continues improving. Unemployment is less than half of the rate in Europe. Among those with a college degree, that rate is an astonishing 2.1%. Other statistics:

* Since 1991, the U.S. economy has created 15.6 million new jobs. Of these, 12 million have been in such high-skilled, higher-knowledge occupations as systems analysts, accountants and computer engineers.

* Total compensation (salary plus benefits) is at an all-time high. In 1997, the average total compensation was over $40,000 per year – $48,000 per year in manufacturing.

* Over 99 percent of manufacturers provide health care benefits to their employees; 78 percent contribute to 401 (k) and pension plans; 54 percent have bonus plans and 35 percent have pay-for-performance incentives.

* Today’s workers are also becoming today’s owners. In 1975, only .28 percent (one-quarter of one percent) of those employed nationwide were involved in some form of employee ownership. Today, 16 million workers -- 12.4 percent of civilian employment in the U.S.– are offered employee ownership plans.

* Unfortunately, the burden of higher taxes on the average worker has created a very real sensation of "working more for less" in spite of their relative prosperity. Since 1949, the FICA tax rate alone has increased 520 percent.


Four N.C. Cities Win Grants for Airports
Federal Department of Transportation grants totaling $7.7 million are being handed out to four North Carolina communities to upgrade and maintain safety at their airports, said U.S. Sen. John Edwards (D-N.C.). Moore County will receive $2,611,111 to improve runway safety areas, expand the terminal building, install new lighting and rehabilitate runways. Charlotte will receive $2,533,425 to repair lighting and expand ramps to handle growth in commuter traffic at Charlotte-Douglas International Airport. the Greensboro-High Point Airport Authority will get $1,345,000 to relocate a road to accommodate construction of a runway safety area at Piedmont Triad International Airport. Onslow County will get $1,242,439 to rehabilitate a runway at Albert J. Ellis Airport.

Death Tax
When you get two-thirds of the House to vote for a bill to repeal the death tax, you've done a good job telling your side of the story. That's what happened in June, as a bill to eliminate the death tax roared out of the chamber. H.R. 8 passed 279-136. A whopping 65 Democrats supported it. The bill would phase out the death tax, reducing the rates down to zero over 10 years. The Administration opposes the bill, arguing the tax adds progressivity to the tax code and doesn't affect more than a few families. But small manufacturers and family farmers carried the day. During debate on the bill, the Administration, which has actually proposed raising estate taxes, threw its support behind a legislative fig leaf offered by Rep. Charles Rangel (D-NY). That measure failed 222-196. With polls showing that nearly 80 percent of Americans support repeal, you'd think the bill would be a slam-dunk in the Senate. Senate Democrats may try to bottle it up to avoid an embarrassing veto. Stay tuned.

Ergonomics
If the House has its way, OSHA won't be able to spend a nickel to implement its proposed ergonomics rule. The ban cleared the House 220-203 and is now part of the Labor Department spending bill for FY 2001, which begins 10/1. The President is threatening to veto it. And if he gets his way, OSHA will have a green light to issue the most expansive workplace rule ever. It would trigger an OSHA-scripted ergonomics program at your plant if just one employee reports a repetitive-motion injury caused by or aggravated by work. Injured employees would immediately qualify for extended time off at 90 percent disability pay. The agency wants to publish the final rule this year -- no matter what. This means, absent a legislative ban, the courts may be our last resort. OSHA says it expects lawsuits from industry -- and from organized labor, which, believe it or not, thinks OSHA's proposal isn't tough enough! With sound science on our side, we expect to prevail, if not in Congress, then in court. In the House vote, North Carolina's seven GOP members of Congress voted to sustain the ergonomic ban and were supported by one Democrat, Mike McIntyre. The Senate followed through and upheld the House position, with Sen. Jesse Helsm (R-N.C.) supporting the NCCBI position and Sen. John Edwards (R-N.C.) opposed.

Health Care
True to form, Sen. Ted Kennedy (D-MA) tried to pull a fast one in June. Not satisfied with the progress of a House-Senate conference committee working on a final managed health care bill, he surprised many by springing a House-passed bill that would expose manufacturers to employee lawsuits. The bill, which was offered as an amendment to unrelated legislation, was voted down 51-48. In the end, all but four Republicans voted to stop Kennedy. No Democrats crossed party lines. The House-passed "patients bill of rights" is loaded with coverage mandates and an explicit, broad employee right to sue. Managed care providers and employers would immediately be vulnerable to malpractice and other health-care suits. Though Kennedy's amendment failed, other attempts to force a vote in the Senate could emerge.

Foreign Sales Corporation (FSCs)
"Thanks, but that's not good enough." That's what the European Union (EU) is telling U.S. trade negotiators after an offer was made to replace a U.S. tax provision that helps American firms of all sizes ship goods abroad. The issue at hand is foreign sales corporations (FSCs), which the WTO says are an illegal export subsidy. The U.S. must now rewrite the FSC tax rules or face retaliatory trade sanctions. Billions of dollars are at stake. FSCs allow up to a 15 percent tax reduction on gross export income. Smaller manufacturers stand to lose, as many participate in what's called a "shared FSC." The replacement regime offered by the U.S. to the EU seeks to maintain the tax benefits of FSCs and stay within the guidelines of WTO trade rules. Even though the EU rejected the U.S. proposal to replace FSCs, the U.S. apparently will stick with it and work to see it enacted into law before Congress adjourns. The EU would then be forced to rechallenge the tax regime under WTO dispute rules.


OSHA Schedules Hearing on Ergonomics Rules
OSHA will hold a public hearing in Atlanta on July 7 to receive comments on the economic impact of its proposed ergonomics standard on railroads, state and local governments and the U. S. Postal Service. The hearing will begin at 9:00 a.m. in Conference Rooms B&C of the Sam Nunn Atlanta Federal Center at 61 Forsyth St., S.W., Atlanta, Ga. 30303.


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