The Hidden Tax on Blue-Collar Workers and Building in America – How Unemployment Insurance Penalizes the Construction Industry

>The unemployment insurance system has a design flaw that penalizes the construction industry, leading to fewer workers and lower productivity. Over time, that means less – and more expensive – housing.

>Americans are concerned that many parts of life have become increasingly unaffordable, especially housing. The United States lacks a sufficient supply of houses, which drives up rent and makes it difficult for people to buy their own house and achieve the classic “American dream.” Building more housing will likely require a larger construction workforce, but these employment opportunities are actively impeded by our ill-designed unemployment tax system.

>Unfortunately, the U.S. unemployment insurance system has a design flaw that penalizes the construction industry, leading to fewer workers and lower productivity. Over time, that means less – and more expensive – housing.

>Most people know of unemployment insurance purely through the benefits side. If you lose your job, unemployment insurance will provide you with a temporary income to help you get back on your feet. But few people are familiar with how unemployment insurance is paid for: a Byzantine tax system that – through a quirk of its design – is disproportionately borne by blue-collar workers in the construction industry. 

>**Construction jobs face roughly $1,000 more in unemployment insurance taxes each year than jobs in other industries.** By eliminating or reducing this penalty, we can support the construction industry and workers while also simplifying and rationalizing our social insurance system.

an interesting breakdown by the good matt on how unemployment insurance penalizes seasonal and macroeconomically volatile industries like construction – leading to lower productivity (and more expensive housing!)