GDOL: Local unemployment insurance needs closer look

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In her State of the Island address last night, the governor unveiled a plan to create unemployment insurance for Guam.

Guam Department of Labor director Dave Dell’Isola told Newstalk K57’s Patti Arroyo what he thinks about it.

The governor proposed funding an unemployment trust by securing no-interest federal loans that can be offset entirely by the amount owed to Guam by the Compact Impact debt.

Dell’Isola said that he thinks the idea is creative and innovative but needs a closer look.

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“This is something that has to be explored and looked at. Because like anything, this is a trust fund that needs to be established. And like anything, somebody has to start somewhere, and that’s always the hardest part. How do you create a nest-egg large enough just to get it kick-started and to handle the people as we move forward,” Dell’Isola said.

Dell’Isola said that unemployment insurance programs, also known as UI programs, are complex.

He said that other jurisdictions have taken anywhere from three to five years to set up their programs.

In response to concerns that UI will disincentivize people to work, Dell’Isola said that UI programs don’t pay enough to live off of.

He also said that people only get out of the program what they put into it.

Dell’Isola said that one of the most important things about unemployment insurance for Guam is that it’s a way to disseminate emergency financial relief.

He said that lack of unemployment insurance hindered the dissemination of CARES act funds during the pandemic.

“That’s what they did with this pandemic … they would infuse your unemployment trust fund with money that’s directed at those people that are unemployed and you have a mechanism to quickly get that money out. And not have to do like I had to do — create a mini-UI program that doesn’t have all the bells and whistles of a UI, and doesn’t have all the protections of a UI. And that’s how I spent so much time handling the fraud,” Dell’Isola said.

Dell’Isola said that UI is often brought up during emergencies but when things are good, no one wants to pay for it.

He said that if Guam wants a UI program in place when it’s needed, that’s an attitude that’ll have to change.

“It always seems to kick up when there’s a disaster, or when there’s a typhoon. When everybody is in need of it, but that’s not the time to start unemployment, that’s the time to…before this pandemic, we had a record economy, record tourism, everything was going good and that’s the time you want to start and build up a nest egg …when you don’t need it,” Dell’Isola said.

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