Massachusetts lawmakers have passed a $130 million spending plan this week. The legislation includes a provision that freezes the unemployment insurance rate that businesses have to pay. This is the fourth consecutive year that lawmakers have put a freeze on the insurance rate, hoping to spare the state’s businesses from costly and, at times, excessive rate increases from insurance companies. Legislators believe that the rate freeze will help stimulate the state’s economy, as businesses will be saving approximately $220 per employee on insurance coverage.
The nation’s economy is still showing signs of fragility, as is evidenced in the volatility of the stock market and the closing of businesses throughout the country. The troubles facing the national economy trickle down to states that are tasked with solving these problems with little to no help from the federal government. Massachusetts legislators believe that the rate freeze is one of the best ways to ensure that the state’s economy is recovering.
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Labor leaders are decrying the rate freeze, claiming that it puts the longevity of the state’s unemployment insurance trust fund in jeopardy. All employers in the state are required to pay into the trust fund, which covers the cost of unemployment benefits for workers that have lost their jobs because of downsizing or other unforeseeable event. Legislators rebuke these claims, noting that the state’s trust fund is currently showing signs of healthy growth.
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