COLUMN: IN OUR OPINION

A policy brief from the Pioneer Institute spotlights chronic obstacle to job creation and retention in Massachusetts: The state's overly generous unemployment insurance system. The report makes clear that the system is broken in two ways. First, companies that provide

Consider: Most states require 20 weeks of employment before a worker is eligible for unemployment; Massachusetts requires just 15. In 48 states, laid-off workers received up to 26 weeks of wage replacement; only Massachusetts offers 30 weeks.

The result is that Bay State businesses shelled out, on average, $652 per employee for unemployment insurance in 2006, nearly twice what they paid five years earlier - and more than every state but Alaska.

In 2003, an effort by then-Gov. Mitt Romney to bring Massachusetts' benefits into line with other states was rebuffed by the Legislature. Instead, amid speculation the system might be underfunded, lawmakers hiked taxes on all employers while making only minor movement toward tax equity across industries.

As the Pioneer report details, construction companies, temporary service firms and seasonal employers such as school bus companies and landscapers continue to have a disproportionate claim on unemployment benefits, with laid-off workers collecting far more than their employers paid into the system.

The generous benefits - 76 percent higher than the national average - are a drag on the economy in a less obvious way as well. As the policy brief points out, the comfortable, extended wage replacement benefit acts as a disincentive to prompt re-entry into the work force.

Even now, with a more than $1 billion surplus in the unemployment fund, the Patrick administration has joined organized labor in opposition to rate relief for businesses. That may play well with businesses subsidized by the system, and some workers, but it further undercuts the state's efforts to remain nationally and globally competitive.

At the very least, the administration and Legislature should close loopholes that permit small business owners collect benefits by "laying themselves off" and should authorize the Division of Unemployment Assistance to garnishee wages in cases of fraud. Even such modest steps would signal the business community that Massachusetts is serious about economic growth.

Organized labor, too, should carefully consider long-term goals. In today's global marketplace, Massachusetts workers and businesses need to be competing in the employment game, not gaming the system at the expense of their most productive colleagues.