As many small businesses struggle to find and retain qualified workers, several states across the country have implemented government-run systems to pay unemployment to individuals who voluntarily walk off the job to go on strike. Unemployment benefits for striking workers create an incentive for employees to abandon their responsibilities without negative consequences like termination or loss of pay.
Small business owners already shoulder the cost of the unemployment system through payroll taxes that fuel their state’s unemployment trust fund. Forcing Main Street business owners to fund benefits for striking workers not only leaves small businesses high and dry in a difficult labor market, but it unfairly undermines the integrity of the unemployment system. Allowing striking workers to collect unemployment benefits threatens the consistent and dependable workforce that small businesses and their communities so desperately need.
The same dollars a business owner pays into the unemployment trust fund will be transferred to a striking worker to pay for their protest against their employer. This will lead to business owners seeing a rise in their unemployment insurance taxes, which will limit the dollars they can use to grow, hire, and invest in other employees.
A recent nationwide study of small business owners conducted by the National Federation of Independent Business found that “Locating Qualified Employees” ranks as the fifth most severe problem in a list of 75 issues Main Street business owners face, with 27% of them evaluating it as a critical problem. This research makes it clear that while many small businesses are struggling to find and retain qualified workers, allowing striking workers to collect unemployment benefits will only worsen this problem and further distort labor markets.
Ultimately, as many states face concerns regarding the solvency of their unemployment insurance systems, further expanding eligibility requirements is the wrong course of action.
An encouraging development for small business owners is that Congress is considering legislation to address this challenge. The Securing Help for Involuntary Employment Loss and Displacement Act, colloquially known as the SHIELD Act, introduced by U.S. Rep. Rudy Yakym, R-Ind., prohibits employees engaged in a strike or similar labor dispute from collecting unemployment benefits, presenting a significant step towards ensuring fairness and integrity in the unemployment system. Clarifying that individuals who are currently involved in a labor dispute are not eligible to receive an unemployment check reasserts the core principle that unemployment benefits are meant to be used as temporary support for workers who have lost their jobs through no fault of their own. Unemployment benefits are not intended to serve as leverage in labor negotiations.
When striking employees are permitted to draw on unemployment compensation, it creates an imbalance that unfairly burdens small businesses and tilts the scales of collective bargaining in favor of labor unions. This imbalance undermines the ability of both sides to negotiate in good faith and upends longstanding labor law in favor of labor unions at the expense of Main Street business owners.
The SHIELD Act would restore the balance to the relationship an employer has with their employees and ensures that unemployment benefits are available to the individuals the programs were intended to help. Congress must pass the SHIELD Act and protect Main Street business owners who are responsible for nearly two-thirds of private sector job growth in this country. Delivering this relief will level the playing field for our nation’s top job creators, allowing them to continue to grow, hire, and give back to their communities.
