PA Chamber: Misguided UC Report Misrepresents Key Facts

The Keystone Research Center recently released an Unemployment Compensation report that misrepresents key facts about taxes paid by employers on employee wages, and PA Chamber Vice President of Government Affairs Alex Halper issued the following comments to set the record straight:

“Unemployment compensation is a critical safety net to help individuals who were laid off through no fault of their own as they actively seek new employment.  We agree with the Keystone Research Center that Pennsylvanians need a financially stable system.  Unfortunately, their recently released report calls for potentially massive tax increases on employers and misrepresents key facts to reach a misguided conclusion.

“The report refers to the amount of wages on which employers pay taxes per employee, known as the ‘taxable wage base.’ In Pennsylvania, the taxable wage base is $10,000.  The report repeatedly claims that this amount is too low and is “less than 33 states and far below Washington State’s $62,500.

“The Keystone Research Center leaves out the key fact that employer taxes are based on both the ‘taxable wage base’ and the rate paid on those wages.  According to the most recent U.S. Department of Labor data, Pennsylvania has the number one highest rate paid on those wages in the country.

“In fact, Pennsylvania employers pay the 14^th highest average UC tax rate in the country; higher than 36 other states…including Washington State.

“The fact is that Pennsylvania employers invest considerably into the UC system – far more than most states. Policymakers should reject any proposal that seeks to achieve a more financially stable system by simply raising taxes on employers.

“We look forward to engaging in constructive, honest discussions and working with the legislature, Gov.-Elect Shapiro and his administration, UC stakeholders, and advocates on policies to improve the UC system.”