States explore huge benefit cuts to spur people to take jobs

Several states are taking steps to slash unemployment benefits for jobless Americans in an attempt to force people into thousands of vacant positions.

Republicans are leading efforts across the country to cut jobless aid, a move that comes as businesses complain about a lack of available workers to fill typically lower-paying jobs.

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Lawmakers in Iowa, Kentucky and West Virginia are moving forward with plans to aggressively reduce the number of weeks of unemployment pay workers are eligible for from 26 weeks to fewer than 10 weeks.

There are only six states that have such harsh limits (40 states pay up to 26 weeks of unemployment benefits): Arkansas and Kansas pay 16 weeks, while Alabama cuts benefits after 14 weeks. In Florida, the unemployed are eligible for only 12 weeks of unemployment pay. Georgia also offers 14 weeks of benefits, while North Carolina offers up to 12 weeks.

jobs

Job seekers attend the Central Florida Job Council’s 25th Annual Job Fair at the Central Florida Fairgrounds. (Photo by Paul Hennessy/SOPA Images/LightRocket via Getty Images/Getty Images)

There is a near-record number of open jobs in the economy, according to a Labor Department Report published this week, with approximately 11.3 million positions available at the end of February. That means there are roughly 5 million more job openings than there are workers, or about 1.8 jobs per unemployed person.

Here’s a closer look at states considering cutting unemployment benefits, and what the proposals could mean for unemployed Americans.

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Iowa

Republican Gov. Kim Reynolds has made benefit cuts a priority, arguing that such programs are too generous and discourage Americans from working.

One measure, backed only by Republican lawmakers, would reduce allowable unemployment payments from 26 weeks to 16 weeks.

The maximum unemployment payment in Iowa is $531 per week for people without dependents; for comparison’s sake, that’s about $27,500 annually, or almost double the Iowa minimum wage ($7.25 an hour).

The proposal comes as Iowa’s unemployment rate fell to 3.5% in February, even though there are an estimated 86,000 open jobs in the state.

Iowa Governor Kim Reynolds speaks during a rally on March 9, 2022, in Des Moines, Iowa. ((AP Photo/File Charlie Neibergall)/AP Newsroom)

Democrats have fiercely opposed the bill, arguing that only a third of open jobs pay a living wage for a family of four.

“He’s breaking something that works for Iowans,” said Democratic Sen. Janet Petersen. “This bill has no heart.”

Kentucky

Republicans in Kentucky have taken a similar approach to Iowa: Last week, Republican lawmakers in the state voted to override Democratic Gov. Andy Beshear’s veto of an unemployment measure that would cut benefits from 26 weeks of eligibility to just 12. weeks.

Kentucky, which has a current unemployment rate of 4.2%, offers a maximum of $552 in weekly benefits to the unemployed, about twice the weekly minimum wage.

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Supporters of the bill, known as HB 4, say it’s necessary to boost workforce participation and help struggling businesses fill vacancies. Critics say the legislation would hurt unemployed people who lost their jobs through no fault of their own and are having difficulty finding a new position.

A large “Hiring Now” sign posted in the windows of the Advance Auto Parts store in Bay Shore, New York on March 24, 2022. ((Photo by Steve Pfost/Newsday RM via Getty Images) / Getty Images)

“Sure, most people mean well,” Republican Sen. John Schickel said of the measure. “But to suggest that some people don’t abuse the system, I just don’t think that’s the truth. And I think we all know that in our hearts.”

West Virginia

The West Virginia Senate passed a bill in early February that would limit unemployment pay to 12 weeks from the current 26 and implement work requirements so recipients must prove they are looking for work.

If the unemployment rate in the state increases, unemployment benefits could be extended up to 20 weeks.

“We need to make our unemployment compensation system less expensive,” Republican Sen. Charles Trump said of the bills. “That’s a big part of being able to grow the business.”

Critics criticized the bill, noting that it does not take into account transportation or child care issues that could impede job hunting.

“This is kicking a man down when he’s down,” said Democratic Senator Mike Caputo. “This is kicking a man or a woman when he hurts them the most.”

West Virginia, which has a current unemployment rate of 3.9%, offers a maximum of $424 in weekly benefits to the unemployed. That compares with the state’s weekly minimum wage of about $328.

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