Unemployment Insurance Reform Has Strengthened Florida’s Economy

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In 2011, Florida’s unemployment system was in crisis. The state’s unemployment trust fund was bankrupt and the state had borrowed more than $2 billion in loans from the federal government just to keep the program afloat. The taxes levied on employers to fund the program were set to nearly triple. Although the state’s regular unemployment benefits were capped at 26 weeks, federal programs had extended how long someone could receive unemployment benefits to a whopping 99 weeks. These benefit extensions were keeping potential workers out of the labor force, driving up the unemployment rate, and driving down job creation.

But that June, Florida began charting a new course. Then Gov. Rick Scott signed an innovative new plan sent to him by the Florida Legislature that tied the state’s regular unemployment benefits to economic conditions, beginning in 2012.

Adopting similar reforms in all states would increase employment by up to 1.5 million new workers, pull more Americans into the labor force, and lead to a modest decline in the unemployment rate. It would help more people cycle out of unemployment and back to work more quickly, reduce taxes on employers, and better prepare states for future recessions.

Florida policymakers put their state unemployment program back on the right track. Other states should take advantage of the current booming economy to move enrollees to independence, lower taxes, and help further grow this booming economy by tying unemployment benefits duration to economic conditions.