The following statement can be attributed to Christine Owens, Executive Director of the National Employment Law Project Action Fund:
“Donald Trump says he has a plan to provide six weeks of maternity leave to working women. From the very limited detail that has been provided, it appears he is proposing paying new mothers six weeks of unemployment benefits and financing the payments by ‘eliminating fraud’ in the unemployment insurance program.
“We do not have much more detail than this, but based on the bare bones outline provided, we are convinced that the proposal fails to meet the medical and caregiving needs of today’s working families and also could cause serious damage to the nation’s unemployment insurance program.
“First, the Trump plan does not appear to include new fathers, and it would not extend to other forms of leave covered by the Family and Medical Leave Act (FMLA). This proposal would not provide payment for the various other medical and caregiving needs covered under federal law—such as up to 12 weeks of leave to care for a new child or seriously ill family member, or to recover from a personal illness or injury.
“Second, the proposal appears to compensate new mothers for only six weeks at levels provided by their state unemployment insurance (UI) programs. Unemployment insurance benefit levels are controlled by state law. There is wide variation between states. Nationally, the average unemployment benefit is only $338 and covers only about a third of a worker’s average weekly wage. Six states have maximum rates below $300. For example, under the Trump plan, a new mother in Florida could not receive a weekly benefit greater than $275. The Trump proposal would provide a benefit that carries with it all the geographical disparities and state deficiencies currently facing the unemployment insurance program.
“Third, the unemployment insurance program has never been less ready to take on the administration and financing of a new program. As of the end of 2015, just 18 states—and none of the 13 largest states, where a significant share of the U.S. workforce resides—met a federally recommended measure of preparedness that advises states to have enough reserves in their UI funds to cover at least a year of a recession. Thus, when the next crisis hits, the result will most surely be a repeat of the excessive federal borrowing by state programs, and even more severe benefit cuts, that without question will hurt families struggling with unemployment and further cripple state economies. All evidence suggests the opposite is needed for a sustainable recovery.
“Fourth, Mr. Trump erroneously buys into exaggerated claims of fraud in the UI system to pay for the new program. There are not enough savings to be derived from unemployment insurance fraud to pay for his proposal. Between 2006 and 2015, unemployment insurance fraud by claimants has been estimated by the U.S. Department of Labor at between 2.3 and 3.2 percent of regular unemployment benefits paid. Over the past three years, a 3 percent fraud rate equates to a little more than $1 billion a year of regular unemployment benefits—far less than needed to pay for this proposal.
“UI ‘fraud’ has become the favored pay-for and punching bag of politicians who have never been committed to the program. Congress has already mandated that states impose tougher penalties on fraud, and the Obama administration has held states to higher performance standards in recovering overpaid UI benefits. These efforts have been to insure the integrity of a program that for 80 years has been a central pillar of economic security for working Americans facing the harsh consequences of involuntary job loss.
“Every responsible paid family and medical leave proposal to date has been premised on a reliable revenue stream from dedicated taxes paid by employees and/or employers. Trump’s plan would rely on the already inadequate funding of a neglected unemployment insurance program that is not prepared for the next recession in order to finance a limited-duration benefit that for most affected workers would not come close to half their regular paycheck, and that would leave out more workers than it would cover. He proposes this—all while taking a cynical swipe at jobless Americans by inaccurately suggesting that there is enough unemployment insurance fraud to foot the bill. This not a serious proposal; it is smoke and mirrors.”
The NELP Action Fund is a project of The Advocacy Fund, a non-profit organization under section 501(c)(4) of the Internal Revenue Code.