Indiana's pandemic response will undoubtedly be the biggest issue in its gubernatorial and legislative election contests this fall. But pandemic preparedness should be part of that debate, including the question of why elected officials have repeatedly rejected a program proven to help workers in an economic downturn and repeatedly forfeited federal funds offered as an incentive to establish work share.
The Indiana Chamber of Commerce is a longtime advocate for such a program, which allows employers to reduce workers' hours instead of laying them off. If Indiana had a work share program in place, the federal CARES Act would cover 100% of all work-share benefits from now until the end of the year, according to chamber president and CEO Kevin Brinegar.
He said last week that 130 Indiana companies have asked why a work share program isn't available.
“It's been very important to them during this pandemic, and they're frustrated that they can't have access to work share here in Indiana,” Brinegar said.
Work share functions as an alternative to traditional unemployment. While participation is voluntary for employers, it gives them the option to retain workers at reduced hours instead of laying some off. Employees can then draw partial unemployment compensation benefits based upon the hours reduced. Under the CARES Act, a form of work share is available to Indiana and the 21 other non-work share states as a “lifeline” provision, with employees whose hours have been reduced receiving unemployment benefits covered half by the state and half by the federal government.
The question remains, however, why Indiana has no work share program and so is ineligible for full reimbursement by the federal government. The relief act also offers $100 million to those states to cover the cost of developing computer systems to establish a program.
The state chamber is calling on Gov. Eric Holcomb to reconsider before the General Assembly reconvenes, “in order to be better prepared for future economic downturns,” but the governor said his office has no immediate plans to start a work-share program.
Legislation filed in the past session in both the House and Senate never received a hearing – repeating a game legislative leaders and the governor's office seemingly play to avoid adopting a program with bipartisan support.
In 2014, Indiana forfeited more than $2 million offered as an incentive to help set up work-sharing programs and to pay for unemployment benefits. Congress, recognizing programs already in place preserved 500,000 jobs during the Great Recession, made the incentive part of the Middle Class Tax Relief and Job Creation Act of 2012. Then-Rep. Mike Pence supported it, but rejected efforts to establish work share when he became Indiana governor.
“While work-sharing programs have been established in other states, there are a number of issues that need to be studied more thoroughly here in Indiana, including long-term administrative cost and the impact on the Unemployment Insurance Trust Fund,” Pence's spokeswoman said in 2014.
“We wouldn't be promoting this if we believed it threatened the integrity of the unemployment trust fund,” Mike Ripley, a former northeast Indiana legislator and the chamber's vice president for health policy, said at the time.
The governor's office and the legislative leaders who repeatedly block it seem to be the only ones who don't like work-share programs. Rep. Tom Dermody, R-LaPorte, was author of the 2014 legislation; Republican Sean Eberhart and Democrats Ed DeLaney and Karlee Macer were co-authors. In addition to the state chamber, it was supported by Indiana AFL-CIO and the Indiana Institute for Working Families. But it died in the House Employment, Labor and Pensions Committee, reportedly because Pence threatened a veto.
As we wrote at the time, a work-sharing program might have placed Indiana in a better position to weather the recession and allowed it to focus on other demands. We urged Gov. Pence to explain why he opposed it.
In the wake of COVID-19, the continuing lack of a work-share program is all the more puzzling. Gov. Holcomb: Why is there no program? What are you waiting for?