| |
Joint Committee on Labor and Workforce Development House
Bill 604; Unemployment Insurance Reform Legislation; Testimony of Chris Anderson, MHTC
Thank you, Chairman McGee and Chairman Rodrigues.
The Massachusetts High Technology Council was formed in 1977 by technology CEOs to make Massachusetts the most competitive place in which to create, operate, and expand high tech businesses. That remains our mission today. Council members employ hundreds of thousands of skilled workers in all of Massachusetts’s key technology sectors, including computer hardware, life sciences, software, medical products, semiconductor, defense technology and telecommunications. Our members include the executive leadership of tech employers such as EMC, Boston Scientific, Analog Devices, Genzyme, and Allegro Microsystems.
Each year, High Tech Council CEOs rate their top policy priorities through our annual survey. We break out the survey into policy areas which are critical to a competitive technology economy: Fiscal/economic policy, education and workforce training, public infrastructure and health care. Priorities change from year to year, but reforming the state’s Unemployment Insurance system has been a common goal of technology CEOs since the early 1990s. To achieve that longstanding goal this year, the Council strongly endorses House Bill 604, An Act Relative to Further Creating and Protecting Jobs, Easing the Unemployment Insurance Burden on Employers, and Preserving the Solvency of the Trust Fund, sponsored by Governor Mitt Romney.
I have been with the Council for more than 20 years, and in recent years have seen a shift in the way the Legislature supports the growth of the technology community. In the past few years the Legislature has supported funding of university-based Research & Development, worked to streamline the state’s permitting system and earlier this year unanimously passed a $261 million bond bill that will help ensure that the U.S. military can bring new jobs to Hanscom Air Force Base.
But there is still one major inhibitor to growth in Massachusetts: the highest cost, most uncompetitive Unemployment Insurance system in the nation. Because we are talking about jobs and livelihoods, this can be an emotional issue. And employers understand that. But when you rationally look at the numbers and see just how much our UI system costs employers, the need for reform becomes apparent.
In fact with the exception of the potential loss of jobs and the hit to the more than $3.2 billion in economic activity if Hanscom and the Natick Soldier Systems Center were to close, the state’s uncompetitive UI system is the biggest challenge our economy faces. This year, employers will pay $1.647 billion into a broken, inefficient system.
The average UI cost per employee more than doubled from 2003 to 2005 --- from $334 per employee in 2003 to an estimated $687 in 2005 (up 103%). Employers in MA pay the highest average UI cost per employee in the nation; we are the only state to provide 30 weeks of benefits while 48 others offer 26; our maximum weekly benefit amount is the highest in the nation ($528) and the average weekly benefit amount is also the highest ($353). On a per employee basis, Massachusetts employers pay on average double what their counterparts pay for UI in New York and California – two of our prime high technology competitors that are also high costs states.
Governor Romney’s proposed benefit reforms are commonsensical and relatively modest. House Bill 604 recommends that the state save $74 million by standardizing the maximum weeks of benefits from 30 to 26 weeks
|
