Severances and Unemployment Benefits

Part of the debate on whether Pennsylvania should accept $270 million in federal stimulus money to beef up the state fund that pays unemployment benefits has to do with the existing condition of the fund. In a word -- it's not good. Like other state funds, Pennsylvania's fund is now borrowing money from the federal government to make the payments and there's a current discussion in government, business and labor circles about how the fund should be replenished from state businesses and employees.

Here's one idea being promoted by Pennsylvania Chamber of Business and Industries.  People who get severances wouldn't be allowed to tap into unemployment benefits until their severance weeks run out. The thought is that with luck and determination that person would get a job quickly and not need to tap into the fund. Meanwhile, why should the taxpayers and businesses pay, especially in the case of an executive-level "golden parachute?"

I can tell you someone who would not agree with that idea -- even though I haven't asked him the specific question. A college graduate, Keith is a laid-off insurance manager who lives in Cheltenham Township. Until January, he worked at Prudential Insurance in Horsham. Two days after he was laid off, he and his wife enrolled in a project management certification course at  Penn State Abington and he paid their tuition with his severance. They think  project management is a skill that will keep them in the middle class. Her thought is that she wants two of them to be qualified. (She's been a stay-at-home mom.)

When I last talked to them, they were just finishing up their semester and struggling to make mortgage payments. They have two school-aged daughters and he was getting as many hours at Sam's Club as he could without affecting his unemployment comp. To them, the time of unemployment, while disheartening, also provided a chance for investment in themselves, just as President Obama suggested. So here's the public policy question: Is paying them $2,000 a month while they go to school a good use of taxpayer money?