HARRISBURG, Pa. - The pluses and minuses of payday lending are playing out in Harrisburg.
The state House Consumer Affairs Committee has advanced legislation that would legalize what some call "predatory" payday lending. Supporters say allowing lenders to charge annual interest rates as high as 369 percent for a two-week loan will help create jobs. However, a new report from the Keystone Research Center shows otherwise, says labor economist Dr. Mark Price.
"Payday lending, when you have an expansion of it, it certainly creates some jobs on the side of the payday lending operation. But it also destroys other jobs in the economy, because consumers are paying these excessive fees, which end up crowding out other spending in the local community."
While payday loans are born from the desperation of people needing money between paychecks, Price says those who don't qualify for them are better off in the long term than those who do.
"There are consumers that payday lenders actually do turn down and are unwilling to make them a short-term, $300 loan. If they don't get a loan, they're less likely to file for bankruptcy than people that the lenders actually do choose to make a loan to."
Lender fees such as those being considered by state lawmakers are what can turn a relatively small loan into an insurmountable mountain of debt, Price says.
"They end up having to take out another loan, and another loan and another loan - and each time, they're racking up these enormous fees, putting those households in worse shape financially."
Payday lending hits rural sections of the state hardest, Price says, areas that often have limited economic opportunities for residents to repay their debts. He notes that a higher concentration of these lenders is typical in rural communities, which he calls "a perfect landscape" for them.
The report is online at keystoneresearch.org.
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With hotter summers bringing hotter working conditions, the Maryland Department of Labor is implementing a heat stress standard to protect workers but workers' advocates said it falls short on specifics.
In 2020, the Legislature directed the Labor Department to establish new heat stress protections for workers. A draft standard was released in January for indoor or outdoor work environments when the heat index is above 80 degrees.
Darryl Alexander, adviser for the National Council for Occupational Safety and Health, said the plan does not establish specifics for monitoring.
"They ought to be required to say how they're going to monitor the workplace for changes in temperature, humidity, heat index," Alexander asserted. "The way they require to monitor the workplace for noise, or chemicals or anything else - that, in their written plans, they have to say how they're going to do it."
Alexander argued ideally, employers would be required to use what's known as a "wet bulb globe temperature meter," which monitors the heat index as well as measuring radiant heat from sources such as ovens or sunlight.
The draft standard requires employers to put an effective heat illness prevention and management plan in writing and provide workers annual heat stress training. When the heat index reaches 90, it requires employers to consider the effects of personal protective equipment on heat stress but there are no specifics on how to do it.
Scott Schneider, another adviser for the National Council for Occupational Safety and Health, said how hard you are working and what you are wearing can both contribute to heat stress.
"If you're working and you're wearing impermeable clothing; like you're wearing, like a Tyvek suit, like you're doing asbestos abatement, or if you're out in the fields and you have protective clothing to protect you from pesticide use; that clothing can prevent you from sweating," Schneider noted. "That also will increase your heat stress risk."
He added when calculating heat stress risk, there are methods to account for protective clothing or harder work. He thinks the standard should include specifics on both. The Department of Labor is expected to have the plan finalized by this summer.
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Minnesota is among the states taking a closer look at extending unemployment benefits to workers who go on strike. A bill making its way through the Legislature would make workers involved in a walkout of at least one week eligible for jobless benefits.
In the past year, labor economists have said, there's been positive movement with wage growth. However, backers of Minnesota's plan are pointing to major gaps between corporate profits and the pay most workers receive.
When those individuals want to fight for fair compensation, Jake Schwitzer, executive director of the left-leaning think tank North Star Policy Action, said they're at a big disadvantage in taking on ownership.
"They can use their considerable profits to engage in bad-faith negotiating tactics, and simply wait out their poorly paid workers," he said.
During labor disputes, Schwitzer said, providing unemployment benefits alleviates hardships and empowers workers to keep fighting.
Critics have cited the potential costs and disincentivizing people to work. However, research from Schwitzer's group estimates fewer than 200 additional workers are added to the unemployment rolls in these cases.
Nearly 10 other states have either debated or enacted similar laws.
John Kontzelmann, secretary-treasurer of UAW Local 125, said a walkout is viewed as a last resort, while noting the recent auto workers' strike was a tough choice for many of his colleagues.
"The uncertainty of no or reduced income, for an unknown amount of time, was very stressful and worrying," he said.
Without small levels of assistance from a union strike fund, Kontzelmann said, making ends meet would have been even more challenging for workers and their families.
The Minnesota bill cleared a House committee this week. It's unclear if it will win final legislative approval.
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Critics say a bill passed by West Virginia lawmakers increases the bureaucratic red tape folks who rely on unemployment benefits have to navigate and could financially hurt families already struggling with the high cost of living and ongoing inflation.
Kelly Allen, executive director with the West Virginia Center on Budget and Policy, said the bill includes new reporting from employers and job research requirements for recipients, but keeps the maximum number of benefits available at 26 weeks.
"Safety-net kind of programs like this, that help bridge families between jobs and keep them economically secure, is a really important tool," Allen said.
Senate Bill 841 also limits the amount of money employers pay into the unemployment fund to $9,500 of an employee's earnings. Supporters of the bill argue the state's trust fund is in peril and say the measure helps save money. The bill goes into effect on July 1.
Allen pointed out that research shows unemployment insurance helps families stay afloat during economic downturns, and provides continuous income for basic household needs. She added that unemployment insurance has also been linked to reduced rates of child abuse and neglect.
"We know that generous unemployment insurance and robust unemployment insurance benefits mitigate the impact that those economic shocks have on families and the data shows can actually reduce child welfare involvement, " Allen continued.
According to state data, the state's unemployment rate was nearly 5% as of the beginning of this year.
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