Effects of Differing Unemployment Insurance Taxable Wage Bases on System Capacity
研究了采用不同灵活应税工资基数（TWB）对州失业保险系统筹资能力的影响，发现灵活TWB能显著增加收入，对雇主和州政府有重要启示。
This paper examines the potential effects of the adoption of of several flexible taxable wage bases (TWB) on the revenue generating capacity of state Unemployment Insurance (UI) programs. The flexible TWB's evaluated include 65 percent, 100 percent, and 200 percent of the state's Average Annual Wage (second preceding year). Results indicate that use of flexible TWB's can significantly increase the revenue generating capacity of the state UI programs. Implications for employers and states are discussed. Controversy over the stability of the federal/state Unemployment Insurance (UI) program is increasing. The controversy stems from a steady and persistent erosion in the capacity of the system to generate needed revenues. By the end of 1984, 17 states and territories had accumulated more than $7.0 billion in debt to the federal UI reserves in the U.S. Treasury. This number may well have risen since then due to the depth and length of the 1982-84 recession. The need for loans from the federal reserves is brought about by a high level of inflation, high unemployment, increased benefit costs, and a low federally recommended taxable wage base (the maximum amount of a covered employee's wages taxable during a year). These factors have led to doubt about the ability of the system to withstand serious future economic downturns [3]. The purpose of this paper is to examine the effects of differing taxable wage bases on the reverue-generating capacity of several states' UI programs at current levels of benefit costs and unemployment. The consequences of these differences for states and their employers are discussed. Funding Alternatives Several remedies have been proposed to return the system to fiscal soundness before it encounters more of the types of problems currently faced by the Cuthbert L. Scott III is an Associate Professor of Management at Indiana University Northwest. He earned a Ph.D. in Behavioral Management Science. Dr. Scott has authored earlier articles on unemployment insurance and organizational behavior. This content downloaded from 157.55.39.173 on Thu, 19 May 2016 05:11:59 UTC All use subject to http://about.jstor.org/terms Unemployment Insurance Taxable Wage Bases 455 Medicare system.' Most of these alternatives involve moving to a flexible taxable wage base (TWB). The recommended levels range from a low of 65 percent of the Average Annual Wage (AAW) (the average of the total wages of all covered employees in a state) of the immediate preceding year to a high of 200 percent of the AAW. At the low end of the recommendations is the 65 percent AAW level chosen by the National Commission on Unemployment Compensation [6]. This choice was part of a much larger set of recommendations for restructuring not only the financing of unemployment insurance, but also benefit levels and qualifying requirements, as well as taxing procedures. The use of a 70 percent AAW TWB was first recommended in 1966 by the International Conference of Employment Security Agencies [5]. Use of the 70 percent AAW TWB was later incorporated into a more complete set of recommendations to stabilize the federal system by Diefenbach [3]. He recommended coupling the flexible TWB with complete federal funding of extended and supplemental benefits programs. In addition to recommending a 70 percent AAW TWB, a State of Utah [9] study discussed the use of a flexible TWB sufficient only to cover changes in the weekly benefit amount (WBA). The WBA is the amount a UI recipient may receive during an eligible week. In this alternative, the TWB would increase as the WBA increases. The Utah study did not necessarily recommend this alternative, but included it as a minimum solution designed to cope only with future increases in WBA's. However, because this alternative does not produce higher contributions when insured unemployment (number of benefit weeks claimed by covered persons) increases, it does not work as effectively as others towards rebuilding the fund. Nor does it contribute towards rebuilding the reserve fund after a period of abnormally high unemployment. (One of the objectives of the UI system is to rebuild each state's reserve fund in the Treasury after each period in which benefit payments exceed tax revenues.) Depending on the state, and the nature of its tax base (agricultural, industrial, etc.), a more extreme proposal is to use each covered employee's total wage as the TWB, which was the level at which Congress originally set the TWB when the program began. The Utah study [9] mentioned earlier discussed another TWB that changes over time, but is not anchored to the Average Annual Wage. This TWB would be tied to the TWB used in the OASDHI system. This alternative was dismissed rather quickly by the study, due to the tight linkage it would create between two programs that deal with such different perils unemployment on hand, and old age, death, and poor health on the other. A needed adjustment in of the two programs could easily produce an inappropriate change in the tax burden produced by the other program. The record-keeping I The federally recommended measure of fiscal soundness for state UI programs is, one and one-half to three years of recessionary level benefits stored in the fund. This content downloaded from 157.55.39.173 on Thu, 19 May 2016 05:11:59 UTC All use subject to http://about.jstor.org/terms 456 The Journal of Risk and Insurance benefits produced by identical TWB 's do not outweigh the possible dangers of such a linkage.