A bill that would cut jobless benefits for unemployed Kentuckians advanced to the state House floor on Thursday after the Kentucky Chamber of Commerce told lawmakers it would “get people back to work quicker.”
House Bill 317, sponsored by state Rep. Russell Webber, would reduce unemployment insurance coverage from 26 weeks to 20 weeks. It also would readjust how benefits are paid, raising the payment rate slightly above current levels for the first five weeks, then steadily lowering them every five weeks after that. And it would shrink a key multiplier used to calculate a person’s benefits.
Critics warned lawmakers that although the statewide unemployment rate had fallen to 4.4 percent as of December, most job growth since the 2008 recession has occurred in the state’s urban areas.
Thousands of manufacturing and mining jobs have disappeared in rural counties, leaving those residents with few alternatives, said Dustin Pugel, a policy analyst at the Kentucky Center for Economic Policy in Berea. Parts of northeastern Kentucky have lost more than one-fourth of their total jobs since the recession, Pugel said.
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“We are putting salt in the wounds of laid-off Kentuckians,” Pugel told the House Committee on Small Business and Information Technology at a hearing on the bill. “Squeezing and then finally cutting off the financial lifeline for workers struggling to find a job in a depressed job market is counter-productive, and it ultimately hampers the stated goals of this legislation.”
The average weekly unemployment benefit in Kentucky was $341 last year, representing just a fraction of workers’ former wages, according to state data presented to the committee. Employers support the state’s Unemployment Insurance Trust Fund through a payroll tax, which in 2017 collected $477 million.
Restructuring those benefits will be “a carrot” that will “incentivize” unemployed Kentuckians to find a new job, said Ashli Watts, who in 2017 was paid $133,344 as the chamber’s senior vice president for public affairs, according to the chamber’s tax returns.
“We have over 200,000 open jobs here in Kentucky, and we need to get people back to work,” Watts told the House committee. “We want to make sure for the workforce issue that we are using an ‘all hands on deck’ approach.”
The committee voted 10-to-7, with one “pass” vote, to approve the bill and send it to the full House.
One lawmaker who opposed the bill, state Rep. Cherlynn Stevenson, said her husband recently lost his job in a round of layoffs at his employer, and she resented the implication that unemployed Kentuckians are idly luxuriating in their current jobless benefits.
“I am grateful that we had this to fall back on,” said Stevenson, D-Lexington. “However, I am offended that you make the assumption that he needed a carrot dangled in front of him to find a new job.”
“Believe me, this went nowhere near covering the costs that we normally would have with his employment coming in. For me, this is trying to push people into taking a lesser job than they would be able to find otherwise,” Stevenson said. “I feel like this is really gonna impact the career paths of a lot of people.”
After the hearing, Webber, the bill’s sponsor, said Kentucky will be a more attractive location for businesses if the state can reduce the tax they must pay to support the Unemployment Insurance Trust Fund.
“That’s what we’re hoping to bring, to make us more competitive for those businesses,” said Webber, R-Shepherdsville.
Webber said he drew unemployment insurance in Kentucky for about a month after his employer closed 20 years ago and laid off its workforce. His personal experience is one reason his bill “front-loads” the readjusted payment schedule, so that jobless people would get more money during their first five weeks of unemployment while they are busy securing a replacement job, he said.
“My intentions were not that this would be an insult to anyone,” Webber said.