OPINION: Hawaii’s Unemployment System Breeds Human Sloths

On a recent trip to the grocery store, I overheard a conversation between two very tired looking young women.

One was working the register, the other purchasing food for her family.  Both knew each other, and were venting their frustrations over the same problem: unemployed boyfriends.

Like so many people on the Big Island, their partners had lost their jobs when the housing bubble burst and construction flat-lined. Only, instead of immediately scouring the help-wanted ads and knocking on doors to seek employment, their men courageously hunkered down at home. Televisions were turned on, beers opened, and the first of a long series of unemployment benefit checks were cashed. The months wore on, and despite the urging of their girlfriends, neither man seemed in a rush to get off the couch. This is a common tale, and for good reason.

Hawaii has the most lavish unemployment insurance system in the nation. With 26 weeks of benefits paying out a maximum of $2180 per month, armchair athletes like these would enjoy 6.5 months of payments under normal circumstances.

But thanks to federal emergency unemployment compensation benefits, certain workers can receive nearly a year of additional payments through a tiered system. With a weekly payout almost double that of a full-time minimum wage worker, why would anyone be in a hurry to get off the government dole?

Shouldering the burden of this bloated support system is left entirely up to Hawaii businesses, paying into the unemployment insurance system through a payroll tax. This tax is cumbersome for employers, and in the end is passed on to employees in the form of reduced earnings.  Those that do have jobs end up paying the price for a system that breeds human sloths. The irony, of course, is that the longer you are unemployed, the less employable you become.

This is exactly what our two beer-chugging heroes discovered when their checks finally stopped coming, and they reluctantly entered a job market that now viewed them for what they were: unmotivated.