In Pennsylvania, we find ourselves in quite the conundrum: a low unemployment rate coupled with a sizable number of unemployment claims — 127,000 at the end of December 2023. This contradiction should serve as a wake-up call for policymakers. After all, if we can’t figure this out, what’s next — claiming we have a thriving economy because we’re counting pennies?
First and foremost, let’s recognize that a low unemployment rate doesn’t mean everyone is basking in job security. Many job seekers are hunting for positions matching their skills or offering stable, full-time work. As industries shift, the disconnect between available jobs and the skills of our workforce is glaring. It’s time we invest in training programs that equip our workers with the skills needed in today’s economy, particularly in sectors like technology and healthcare. Otherwise, we’re just setting them up for disappointment.
Moreover, Pennsylvania’s economy has a significant seasonal component. Industries like agriculture and tourism see their fair share of temporary layoffs, which, let’s face it, inflate unemployment claims like a hot air balloon. While these jobs are essential, we need to encourage diversification. By creating a business-friendly environment, we can attract industries that provide year-round opportunities rather than relying on the whims of the seasons.
And then there’s the gig economy. Many people turn to part-time or freelance work out of sheer necessity, leading to claims when they inevitably seek something more stable. While gig work has its perks, workers must be clued in on the trade-offs and have access to resources for long-term financial stability. Otherwise, we’re just leaving them in the lurch.
This situation hits small businesses right in the wallet. These enterprises are the backbone of our economy, yet they struggle to find skilled labor, exacerbated by the high unemployment claims. Workers relying on unemployment benefits as a long-term fix may feel less inclined to seek available positions, leaving businesses high and dry. Small employers depend on a motivated workforce to thrive, and the current system may unintentionally discourage the very job-seeking behaviors we desperately need.
To tackle these challenges, we should seriously rethink how we structure job search requirements for unemployment benefits. Legislative changes are crucial. For instance, let’s implement laws that incentivize active job searching and skill development. This could mean mandating a certain number of job applications per week, along with access to job fairs and networking opportunities that lead somewhere.
Additionally, creating tax incentives for small businesses that hire unemployed workers could spark job creation and cut down on claims. Such measures encourage hiring and foster a sense of partnership between employers and job seekers. Who doesn’t love a win-win?
Our unemployment system must evolve to reflect these realities. Consistently high unemployment claims should not be the status quo; benefits should be a temporary safety net, not a long-term life raft. By incentivizing active job search efforts through legislative measures, we can help individuals transition back into stable employment more quickly — benefiting both workers and small businesses alike.
Ultimately, a thriving economy is built on opportunity, not dependency. As Pennsylvania moves forward, let’s prioritize reforms that empower our workers, enhance workforce skills, and cultivate an environment ripe for job creation. By shifting the narrative from merely counting claims to creating pathways for employment and success, we can ensure our small businesses can thrive in a vibrant economy. At the end of the day, it’s not just about the numbers—it’s about people and their potential.
Jess Ward is senior director of state affairs for the National Taxpayers Union.