Some states are curbing unemployment benefits to combat the Great Resignation
March unemployment rates declined to 3.6% and are close to reaching pre-pandemic levels. And as the Great Resignation drags on, many big businesses are struggling to fill open roles. In response to the tight labor market, state legislatures across the U.S. are considering rolling back many pandemic-era unemployment benefits that millions are still relying on.
Nine states have introduced legislation that would amend and shorten unemployment insurance benefits. The laws range from decreasing the duration of jobless aid to adding requirements for who can qualify for unemployment.
Both the states and federal government responded to pandemic-era job loss with a wide range of generous unemployment benefits. But the unemployed have seen a slow rollback of these benefits since June 2021, when 25 states prematurely withdrew from enhanced federal unemployment benefits. Mostly Republican lawmakers argued that generous benefits encourage individuals to avoid work.
Yet studies have shown that people who receive unemployment benefits are more likely to look for a new job. And opponents of these changes argue that it will put pressure on those financially burdened by the pandemic to find jobs that are not beneficial in the long term. They say that cuts to unemployment benefits could increase racial wealth inequality since there are still higher rates of unemployment amongst Black and Latino workers.
Still, many Republican-led state legislatures are beginning to make changes. Missouri is considering legislation that would reduce the duration of unemployment benefits from 20 to eight weeks. Iowa, Louisiana, New Hampshire, Oklahoma, and Wisconsin are proposing similar changes. Mississippi and West Virginia lawmakers were also discussing cutting unemployment benefits, but CNBC reports that legislation did not move forward in those states.
The state paving the way for cutting unemployment
In March, the Republican-led House and Senate in Kentucky were able to override Democrat Gov. Andy Beshear’s veto of House Bill 4. This bill reduces the length of unemployment benefits by more than half, from 26 to 12 weeks.
The law also added job search requirements for unemployed individuals: In order to collect benefits, the unemployed have to show they’ve searched for five jobs a week (up from one a week). It also changes the definition of “suitable work” to include job opportunities that are within a 30-mile radius of the applicant’s home, if a worker is able to do the job, and if the salary is around 120% of weekly unemployment benefits.
Last, but perhaps most drastic, the new “suitable work” requirement states that if a person has been on unemployment benefits for six weeks, any job offer is considered suitable work regardless of salary or location.
Beshear openly disagreed with this bill, saying that the law was callous. “It’ll show the world, sadly, that we as a state care less about those that have fallen on hard times than other states,” he said in a statement posted to his social media.
State Sen. Phillip Wheeler, a Republican, apparently shed tears when opposing HB4. Concerned for the welfare of his constituents and rising population loss in his county, he said the bill would be “putting more people under the poverty rolls, more people under the Medicaid rolls, more people under the food stamp rolls.”
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