Pennsylvania’s House Republican Policy Committee on Thursday heard testimony from several small-business executives Thursday suggesting that unemployment compensation (UC) taxes, among other issues, pose major impediments to economic growth in the Keystone State.
As The Pennsylvania Daily Star reported this week, Pennsylvania has lagged behind other states in terms of making up economic ground lost during the COVID-19 pandemic. In July 2022, about 6.17 million Pennsylvanians held jobs, a 2.8-percent rise over the same month one year prior. National employment meanwhile increased 3.7 percent during that time.
Regarding UC taxes, lawmakers considered the suggestion that they are calculated in a way that is too punitive for responsible business owners. Dave Crouse, owner of 3Cs Family Restaurant in Orwigsburg, relayed his experience watching his UC tax rate rise from 0.013 percent raised to 0.062 percent in January, roughly costing his business an additional $1,800 in the first quarter of 2022 alone.
Crouse, whose establishment has been in operation for 48 years, said he was assured that the burden of unemployment taxes would not rise due to lockdowns implemented amidst the onset of COVID. Nonetheless, the commonwealth informed 3Cs that its recent “insufficient employment experience” triggered a higher rate, per the UC formula mandated by state law. The restauranteur has appealed the increase to the Pennsylvania Department of Labor and Industry, observing that large-scale layoffs only occurred in 2020 and 2021 as a result of COVID countermeasures that his business followed perfectly.
“My business was shut down for no fault of my own — zero negligence on my part,” he said. “I played by the rules and listened to ‘the science’ which we now know was a lie, yet we seem to let that slide … . I don’t just sit back and take it; it doesn’t fare well with me.”
Crouse’s state senator, David Argall (R-Mahanoy City) appeared alongside House Republicans on their panel and said he is working on legislation to adjust the UC tax formula. Argall’s House colleague Martin Causer (R-Coudersport), who chairs the Majority Policy Committee, indicated he’s enthusiastic to usher such a bill through his chamber.
“[Crouse’s experience] demonstrates just how broken our UC system is, and the pandemic really demonstrated that,” the representative said. “Our legislative offices turned into UC centers and then the Department of Labor and Industry stopped taking our calls; they would not take calls from legislative offices. They said, ‘Oh, email us and we’ll get back to you.’ They still didn’t.”
Mike Hammer, senior director of operations at the equipment company Industrial Hydro, echoed Crouse’s concern about UC and said that the costs of childcare and housing in central Pennsylvania should be also addressed to attract more workers.
While Industrial Hydro has 1,153 employees now, it “need[s] 100 more,” according to Hammer, adding that Pennsylvania’s economy doesn’t so much need “job creation” as the means to “fill the [openings] we’ve got.”
He said that the workforce problems exacerbated by unemployment insurance and other factors will lead to a greater reliance on automation. He suggested legislators can provide support for businesses like his in the form of increased emphasis on scientific, mathematical and technical education.
“[Some] jobs will move from manual labor to basically [tech workers], the folks who write the code that tells the robots where to move from point A to point B,” he explained.
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Bradley Vasoli is managing editor of The Pennsylvania Daily Star. Follow Brad on Twitter at @BVasoli. Email tips to [email protected].
