As the pandemic-era labor market recovers, state legislatures are proposing legislation to reduce unemployment benefits, a trend that began in the wake of the Great Recession.
A bill to modify benefits has been proposed by lawmakers in nine states so far this year.
Most people want to reduce the length of unemployment benefits. According to labor advocates, some would reduce the weekly benefit amount or make recipients’ job-hunting requirements more stringent.
The Republican-led legislature in Kentucky overrode Democratic Gov. Andy Beshear’s veto in March, and the measure became law.
When unemployment is low, the maximum duration of benefits is reduced by more than half to 12 weeks, which is tied with Florida and North Carolina for the shortest duration in the United States according to the new legislation In most states, the standard for parental leave is 26 weeks.
If unemployment is low, Missouri is considering legislation that would reduce the maximum duration of unemployment benefits to eight weeks (from the current 20 weeks).
According to the National Employment Law Project, an advocacy group, other bills are pending in Iowa, Louisiana, New Hampshire, Oklahoma, and Wisconsin, while recent proposals in Mississippi and West Virginia did not move forward.
Some unemployed people will be forced into low-paying jobs outside of their career fields because of the cuts. This raises questions about racial equity since Black and Latinx people are more likely to be unemployed than other groups.
In light of the serious flaws in-state programs that the pandemic has revealed, some critics have argued that these actions are also shortsighted.
If we don’t have a strong set of federal standards, states can keep chopping it away,” says Amy Traub, senior researcher and policy analyst at the National Employment Law Project. It will be reintroduced next session if it does not pass this [legislative] session.
At a time when there are more unemployed people than job openings, state legislators who support the legislation say the policy changes will help recipients get back to work more quickly.
A similar argument was made in 2021 when about half of the states (mostly Republican-led) opted out of federal unemployment programs several weeks before Labor Day expired. There was little evidence at the time that these moves had a significant impact on the number of job seekers.
Others believe that states are making reasonable adjustments to their benefits programs in response to the current job market and to help replenish the trust funds that are used to pay them. Employers contribute to the trust funds through payroll taxes.
Matt Weidinger, a senior fellow at the American Enterprise Institute, a right-leaning think tank, said, “All these things have a cost.” When it comes to the future, how can we reduce these costs in a way that connects benefit payments to employment trends?
Benefits are reduced
According to the Congressional Research Service, all states had up to 26 weeks of unemployment insurance prior to 2011.
There are 10 states that are expected to reduce them over the next decade, according to the Congressional Research Service: Alabama Arkansas Florida Georgia Idaho Kansas Michigan Missouri North Carolina, and South Carolina During the Covid-19 pandemic, some of them were resurrected.
Individual weekly benefits were also reduced or made more difficult for some workers to collect. There was no need for a tax increase on employers because of this.
As Weidinger put it, “This is a trend that began following the Great Recession.” As a result, more states are following suit, which is understandable.
As with other recent state legislation, the length of unemployment benefits in Kentucky is tied to the state’s unemployment rate.
At least 4.5 percent of the state’s workforce is out of work at the time of a worker’s application for benefits. For a maximum of 24 weeks, when Kentucky’s unemployment rate exceeds 10 percent, that time frame is extended.
(In April and May of 2020, Kentucky’s unemployment rate rose to over 10%, when it was 16.5% and 12.6%, respectively. Since the beginning of 2022, the percentage has been below 4.5 percent.’
The definition of “suitable” work varies from state to state. When a person accepts a job offer that is in line with their qualifications, they are usually no longer eligible for benefits.
For the purposes of this law, a job offer is acceptable if the applicant has been receiving unemployment benefits for at least six weeks, the job is located within 30 miles of their home (or can be done remotely),
the applicant is capable and qualified to perform the duties of the position even if they lack relevant experience or training, and the pay is at least 120 percent of their weekly unemployment.
When he vetoed the bill, the governor referred to the policies as “callous.”.
People would have to accept any job, not return to a career path, in just six weeks, Beshear said.
As a result, “it will show the world sadly that we as a state care less about those who have fallen on hard times than other states,” he said about the legislation. “Then we’re not as competitive as we could be.”
State Senate majority floor leader Damon Thayer said in March that the state had more than 100,000 unfilled positions in all sectors.
As he pointed out, “Help wanted” signs could be seen all over. As long as you’re fit and able-bodied, there’s no reason why you can’t find a job in Kentucky.