Servers Not Served – Unemployment Insurance Not Provided to Thousands of Hospitality Workers Across Massachusetts

By: Patrick Maguire

Book Chapter: Human-to-Human Service

Posted: 07/17/2021

This guest post is provided by Molly Kivi, an accountant turned unemployed server, who believes hospitality is a way of life. When the pandemic started, she used her knowledge of law, taxes, and government bureaucracy to serve her fellow restaurant workers by advocating for needed change in the flawed unemployment insurance program.

On July 22nd at 5pm the Commission to Study Unemployment Insurance Trust Fund Solvency will hold a public hearing about the importance of safeguarding Massachusetts workers’ access to unemployment insurance. The Commission is jointly chaired by Senator Pat Jehlen of Second Middlesex district and Representative Josh Cutler of Sixth Plymouth district. You can sign up to speak at the hearing here.

This commission was enacted into law on April 1st, 2021, in response to the Unemployment Tax and Benefit Reform campaign. This restaurant-worker led campaign began in March of 2020 to warn lawmakers that the unemployment system was not ready for fiscal and social emergencies such as COVID-19.

Unemployment insurance is an important public health and economic stability tool. The restaurant industry employs 10% of the nation’s labor force. In 2020, we realized that the state’s UI program was not ready for a crisis. Facebook groups like Industry United, MA Unemployment Consultation, and MA PUA and UI Unemployment Help sprang up in response to an entire industry of people having issues accessing benefits.

Unemployment insurance is designed to protect workers from economic devastation when forces out of their control take their livelihood away. Workers are forced out of their jobs all the time due to unsafe work conditions, job duties, and workplace behaviors that are unlawful, as well as layoffs due to economic downturns and in industries that experience cyclical job losses, like the arts and construction.

Despite its importance for safeguarding workers’ livelihoods, the Massachusetts unemployment insurance system has some significant structural flaws. The benefit payments do not factor in purchasing power, so insurance increasingly fails to help workers deal with a rising cost of living. The tax system used to fund the program is also regressive, because the taxable wage base is capped at the first $15,000 of workers’ income. Furthermore, because employers’ tax rates increase when layoffs occur, smaller businesses end up paying into the system higher rates than large businesses that are better able to weather business cycle fluctuations. Finally, for decades the trust fund that holds the money to distribute benefit payments has not collected enough revenue to comply with the Department of Labor standards, due to a  tax break benefiting big business enacted in 1997 costing the state 13 billion dollars.

The effects of an insolvent trust fund ripple throughout the state economy, ultimately hurting the working class the most. The application process places a cumbersome administrative burden on unemployed workers, and restrictions on access often disqualify workers unjustly. The taxes used to pay interest on the loans that Massachusetts takes out to cover its unemployment insurance liability are levied with a regressive impact on small businesses and workers.

The restaurant industry serves the public. We host families on special occasions, we calm the nerves on first dates, and we provide the place for friends to gather. As an industry we were asked again to sacrifice. To stay home, lose out on job security and income to protect the public health of our communities. Unfortunately, the social insurance that was supposed to be there was not there for many restaurant industry workers.

If you have a story about your experience with unemployment insurance, please sign up and share it. July 22nd at 5pm is our day to be heard. Thank you.

Please watch this YouTube video for a more in-depth understanding of Unemployment Insurance:  Solidarity LIVE! Unemployment insurance: making it more equitable in Massachusetts. With Molly Kivi.

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