More than 35 state representatives say Texas shouldn’t check whether applicants are actually unemployed before granting unemployment benefits. They have written a letter to Gov. Greg Abbott and the Texas Workforce Commission “requesting they temporarily suspend unemployment certifications in hopes of making better use of resources.”
According to one of the letter’s authors, state Rep. Michelle Beckley, D-Carrollton, “We are trying to take some of the burden off the system we have right now, temporarily.”
Unemployment certifications are a simple and very basic guard against unemployment fraud and waste. Suspending them now would be a mistake. Government has a fundamental duty to the taxpayer to ensure that precious—and scarce—resources are used property and effectively. Now is not the time to enable fraud and abuse; eligible Texans need that money.
There’s no doubt that the TWC has been hit with an unprecedented number of claims; as of May 11, the number of applications made (since March 14) topped 2.32 million, with more than $4.3 billion in unemployment compensation paid out.
But the fact is that the TWC has been ramping up its capacity to meet the needs of out-of-work Texans. As the Texas Tribune reports, “the Texas Workforce Commission expanded its staff, added call centers and increased its number of servers.” The TWC doubled its number of call centers, from four to eight, and even brought in other state employees (such as House and Senate staffers) to help answer phones.
It’s disturbing that Rep. Beckley and her co-authors cite California as an example to follow. News reports show that California’s unemployment benefits situation is a train wreck.
“At a time when every penny counts in the family budget, Californians who get unemployment benefits are facing unanticipated barriers to getting their money,” NBC Bay Area reports. “…Of the hundreds of NBC Bay Area viewers who have called, emailed, and messaged us with unemployment complaints, many say they have no idea where their money went.”
California contracts with Bank of America to operate its unemployment benefits system. And Bank of America is set to make a killing.
“The bank’s fee disclosure lists several possible fees for using EDD unemployment debit cards,” NBC Bay Area explains. “The fees include a $1 ATM fee for transactions at non-Bank-of-America ATMs (you get two free per deposit), a $15 emergency transfer fee, and a $10 ‘express’ card replacement fee.”
One consumer group adds, “This is a huge windfall for Bank of America.”
California is no model for Texas on how to do business. As that Carrollton state rep should surely know (since the Dallas-Fort Worth region is a major beneficiary of this trend), Texas is the No. 1 destination for businesses moving out of California.
“California companies leave because the state’s business climate continues to worsen, particularly with the harsh employment, immigration and spending measures that Gov. Gavin Newsom has approved,” says Joseph Vranich, the author of a 2019 study. “I foresee more exits because California politicians have a level of contempt for business that has reached epic lows.”
Don’t California our Texas. Instead, let’s do what Texas does better than any other state—provide freedom and opportunity.
The answer to the horrific unemployment numbers we’re seeing as a response to the coronavirus pandemic isn’t to expand unemployment benefits to the undeserving; it’s to do everything we can to reduce unemployment. That means getting Texans back to work, in the restaurants and retail establishments, in the bars and manufacturing facilities and in the movie theaters and Main Streets.
The thing about this Great Cessation is that it doesn’t reflect any fundamental economic problem. It’s entirely self-imposed. And now that we can do so safely and smartly, we can—and must—fully restart the economy.
The Texas Miracle—the result of the Lone Star State’s model of low taxes, reasonable regulations and more opportunity for all—can happen again. But it won’t happen if we decide California is a better model.