New Mexico’s unemployment “insurance” program in dire need of reform

The debate over what to do about unemployment is (at least theoretically) on the agenda during the special session. Unfortunately, no matter what happens, there are major problems with the system in our state.

For starters, according to Capitol Report New Mexico (reporting on a report from the Department of Labor), the state overspent by $104.7 million, the third highest amount in the nation. In Oregon, a system called JOBS Plus provides incentives for work rather than continued unemployment. According to the Cascade Policy Institute, the sister think tank of the Rio Grande Foundation, this program “uses money that would otherwise pay a person not working to instead subsidize a new private sector job. The presence of these jobs eliminates the disincentive to job
search, because one has to accept such a job or lose benefits.”

Might New Mexico learn from this example to reform its own, failing unemployment system?

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One Reply to “New Mexico’s unemployment “insurance” program in dire need of reform”

  1. The federal extension of unemployment benefits to 99 weeks has totally drained the NM system. There are no incentives for someone on unemployment to seek a job. I say the benefits should be reduced by 10% each month after three months to serve as an incentive to get folks out looking for a job. My unemployment insurance was about $30.00 per month in Dec 2010, but because the Department of Workforce Solutions approved unemployment benefits for two of my former employees who just walked off the job, my insurance costs went to nearly $300.00 per month in Jan 2011. During the 99 weeks that that last former employee was drawing benefits, I received two calls from prospective employers about him. Therefore, I doubt that he was looking for a new job very much.

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