Ed Sivak is the founding director of the Mississippi Economic Policy Center. As director, Sivak coordinates the center’s efforts to advance public policy issues that affect low-income and low-wealth Mississippians. Among those issues is a proposed change in the state’s unemployment compensation. He answered these questions about the proposal from the Journal’s Bobby Harrison:

Q: What is the change to unemployment compensation being considered by the Mississippi Legislature?

A:The Legislature is considering a change that will allow Mississippi to use recent earnings to determine eligibility for unemployment insurance compensation. Under current law, if a person is laid off in June of this year, not a single penny of wages – wages on which unemployment insurance taxes were paid – earned in 2010 would be used to determine if that person qualifies for compensation.

As a result of the policy change, 6,600 Mississippians who lose their job through no fault of their own and who have otherwise earned enough to qualify for unemployment insurance compensation will be assisted.

Q:Some opponents say this change would result in a tax increase on Mississippi employers, who are taxed to support the unemployment trust fund. Would it?

A: Once the policy change is made, Mississippi would qualify for $18.7 million from the federal government. The federal funds could be used to pay for the increase in benefit costs. Once the federal funds run out, under current economic conditions, the policy change will cost $14.5 million a year.

To cover the cost, unemployment insurance taxes would increase. For businesses that have not experienced layoffs and subsequent eligible unemployment claims, the tax increase resulting from the policy change would be small. For those that have former employees filing eligible claims, the unemployment insurance taxes would be higher as that is how the system works.

Q:Are other changes to unemployment compensation needed in Mississippi?

A: Changing the eligibility determination process to include recent earnings represents an important shift in Mississippi unemployment insurance compensation policy. It would assist 6,600 workers and bring $18.7 million into the state to spur economic activity during these difficult times. Additionally, the majority of Southern states have already implemented thischange.

Other changes that merit further consideration include options to assist people who enter work force training to compete for other employment, part time workers who can only work part time and entrepreneurs seeking to start a business when they have lost their job through no fault of their own.