Oklahoma Watch: New tax law to help businesses reduce support for unemployed Oklahomans | Government and politics
Lionel Ramos Oklahoma watch
Republican lawmakers have passed a law cutting corporate taxes, but critics say it comes at the expense of unemployed Oklahomans.
The law, which was passed on a cross-party basis in both the House and Senate, cuts the maximum number of weeks unemployed Oklahoman workers can receive financial assistance from 26 to 16 effective Jan. 1.
Currently, Oklahoma provides the same number of weeks of unemployment benefits as 40 other states. But when the 1933 House Bill takes effect, only four states will offer fewer weeks of emergency income to those seeking employment.
Oklahoma Watch has requested interviews with the author of the law and the five sponsors. None of them answered.
Supporters of the bill have told other media that fewer weeks of support for Oklahomans would save companies money by reducing their unemployment assessments, which are based on the number of claims paid against them. . These savings will allow companies to increase their wages, the lawmakers said. But there’s no guarantee that will happen, and lawmakers haven’t raised the state’s minimum wage by $7.25 an hour since 2009.
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Cutting the time Oklahomans can receive unemployment assistance by nearly 40% won’t save the state money because those payments don’t come out of the annual budget, according to a tax impact review. Oklahoma employers contribute to a large trust fund and benefits are paid out of the trust.
Democratic lawmakers and an Oklahoma City attorney representing the unemployed said the benefit cuts could force jobless Oklahomans to accept low-paying jobs out of desperation.
Sen. Michael Brooks, D-Oklahoma City, said many Oklahomans cannot afford to return to work.
“I think there was a presumption that our unemployment benefits were too generous, and I think that’s probably wrong,” Brooks said. “I think there are some real issues, like trying to find daycare and making those arrangements to get back to work.”
Nearly 11,000 Oklahomans were receiving unemployment assistance as of the last week of June, according to the state’s latest tally. That same week, an additional 1,749 new applications were filed.
Rep. Ryan Martinez, R-Edmond, authored the bill and said its goal was to address the labor shortage.
“You can’t find an industry in the state of Oklahoma right now that isn’t begging anybody to come and work for them,” Martinez told the Journal Record in May. “Let’s make it financially logical for someone to go and take one of these jobs.”
Labor force participation is at its highest level in state history, according to the latest data posted on the Oklahoma Job Security Commission website.
And unemployment is at its lowest level in 20 years. Oklahoma’s unemployment rate was 2.8% in May 2022, down from 2.6% in February, the lowest rate in more than 20 years.
Attorney Kathy Bushnell represents Oklahomans who were denied benefits or mistakenly received benefits without qualifying during the height of the pandemic. She said the new law benefits employers while leaving workers’ needs unmet.
“Oklahoma is all about business,” Bushnell said. “To hell with the little guy. That is what I see when I read this bill.
Employer tax rates are based on a percentage of their payroll and are determined by the number of claims. Fewer weeks of unemployment benefits for Oklahomans means fewer claims against an employer, which leads to lower tax rates.
The law also has a second part from 2025 that will base the number of weeks available to the unemployed on the number of approved applications. The number of weeks will fluctuate between 16 and 21, increasing as claims increase and decreasing as claims decrease.
The Oklahoma State Chamber of Commerce, which bills itself as the leading advocate for business statewide, lobbied for the bill.
State House CEO Chad Warmington said Oklahoma’s economy is doing well. He said wages were rising and there were plenty of private sector jobs that were available that weren’t being filled.
“Our view is that the system should not be so benefit-rich that it would deter people from returning to work,” Warmington said.
Wages rose about 6% in Oklahoma from 2019 to 2021, according to the most recent data from the Bureau of Labor Statistics. Nationally, over the same period, salaries rose about 9%, bringing the average annual salary to $58,260 nationwide, compared to $48,360 in Oklahoma.
Bushnell said unemployment insurance is widely misunderstood as a state benefit.
“It’s not a government gift,” she said. “If you’re getting benefits, that doesn’t mean you’re taking anything away from someone else. It’s a deserved advantage. You wouldn’t hesitate to file a claim for workers’ compensation or disability.
Chakara Winston lost his job, earning $50,000 a year in a corporate merger in February. She lives in a five-bedroom, three-bathroom home with her seven children and her partner. She spends about $500 every two weeks on groceries. Her partner brings home an unstable income working in construction, which depends on weather conditions.
“We’ve already stopped doing a lot of things,” Winston said. “No holidays, no family outings; we went to the park, but no barbecue, no party, nothing.
The family lived on Winston’s savings for nearly four months as they searched for a job with comparable pay. But last month, she realized she would soon be unable to pay her $2,230 mortgage.
Winston filed for unemployment assistance on June 21. She also asked for other government assistance, including the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families.
Lacey Emmerson is a kitchen manager at Alcott Middle School in Norman, a single mother of four who is dependent on unemployment for 12 weeks each year during summer vacation. She said she sees where Republican lawmakers are coming from.
“As a manager, I’m understaffed all the time because people don’t want to work,” Emmerson said. “I’ve taken jobs in my past that I didn’t want to take, but if you have bills, you have to.”
For Winston, this logic does not work. She said she can’t work at a job that doesn’t pay her bills. She said she needed to earn between $23 and $25 an hour to support her family.
Brooks said the labor shortage problem had less to do with a reluctant workforce than with the fact that Oklahoma’s $7.25 minimum wage was artificially low and stagnant. since 2009.
“Working full time and being paid a living wage, considering inflation and everything that’s going on, is not possible with the minimum wage we have,” he said. “I think in Oklahoma sometimes we try to sell ourselves because we have a low cost of living, but I think sometimes we sell our workers short.”