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Kentucky Seeks Jobless Aid Reduction to Bring People Back to Work

Republican lawmakers and business groups argue that the state’s economy is suffering from too many people collecting unemployment benefits instead of working. But the effort could remove a financial safety net.

(TNS) — The Kentucky House approved a bill Thursday that would reduce jobless benefits in an effort to spur people back into the workforce faster, although critics warned that such cuts could make the next recession harder on families.

Unemployment insurance is a stop-gap measure that's only available to workers who lose their jobs through no fault of their own, Rep. Josie Raymond, D- Louisville, said in a House floor speech before her colleagues voted 57-to-37 to send House Bill 4 over to the Senate.

"These are not the fabled moochers of someone's imagination," Raymond said during a three-hour House debate.

But Rep. Phillip Pratt, R- Georgetown, said Kentucky has more than 100,000 job openings. His own landscaping business has advertised for workers without getting any job applications, Pratt said.

"We need help, we need employees," Pratt said.

The House Committee on Economic Development and Workforce Investment approved the bill earlier Thursday. The bill would shrink the length of time that unemployment insurance is available and add new requirements prompting people to search for work more frequently and take "suitable" jobs in their region more quickly.

Republican lawmakers and business groups, including the Kentucky Chamber of Commerce, say the state's economy suffers because too many Kentuckians collect unemployment insurance instead of going to work. The percentage of adults in the state's workforce steadily dropped from nearly 64 percent in 2000 to 56 percent last year, according to a Kentucky Chamber report.

"I'm from one of the 31 economically distressed counties, and before I came up here, part of my job was bringing in business," Rep. Josh Bray, R- Mount Vernon, told his fellow committee members at Thursday's hearing.

"The largest barrier we have is our workforce participation rate," Bray said. "You can't bring a factory into a county that has more people not working than working. It's impossible. So I applaud you all for trying to fix it."

Labor and religious leaders testified against the bill, warning that it would cut an important safety net.

Although employers are impatient right now to get more job applicants, they said, the problem is more complex than people simply choosing to linger on public benefits. In many cases, Kentuckians can't find jobs that match their skills or experience or that pay a wage similar to their previous jobs, the bill's opponents said.

"What rationale can there be for enacting a law that will harm Kentuckians already hanging by a thread?" asked the Rev. Dale Raines of the Kentucky Council of Churches.

The bill would force unemployed Kentuckians to accept any job available in the region after six weeks of collecting benefits, even if it paid "barely over half of what they had previously earned," Raines said.

"What would that do to their ability to pay their mortgage? What would that do to their ability to pay their rent? How many might end up homeless — not only the workers, but their families, their children. Are we really willing to sacrifice our neighbors so that some of our corporate neighbors can pay lower wages in order to increase profits?" Raines asked.

Democratic Gov. Andy Beshear told reporters Thursday that he opposes the bill, calling it "the second kick of the mule" to Kentuckians following on past budget cuts to state unemployment insurance offices that made benefits difficult to obtain during the COVID-19 pandemic. People trying to file jobless claims faced long lines in person and obstacles on the phone and Internet that sometimes meant they went months with no assistance.

"It's not going to help our workforce participation," Beshear said. "It's just going to harm some people who need that safety net benefit."

The bill's benefits cut also could complicate the legislature's plan to replenish Kentucky's unemployment insurance trust fund using $312 million in federal American Rescue Plan Act money. Replenishing the fund to its pre-pandemic level is necessary to avoid an increase in contribution rates paid by the state's employers.

However, the U.S. Treasury has rules about the use of ARPA money that prohibit states from using it to replenish their unemployment insurance trust funds while simultaneously cutting jobless benefits, state budget director John Hicks told lawmakers in a Feb. 9 letter obtained by the Herald-Leader.

The legislature can use the ARPA funds as it wishes in the state budget "or choose to reduce the number of weeks of benefits payable to Kentuckians who have lost their job through no fault of their own, not both," Hicks wrote.

No More 26 Weeks

The bill would end the 26 weeks of jobless benefits currently provided in Kentucky, as in most other states.

Instead, people would collect benefits from between 12 to 24 weeks, with the length determined by a calculation known as "indexing." The state would use the average statewide unemployment rate of a recent three-month span of time to determine how long jobless benefits should last.

Critics say basing current benefits on months-old unemployment data leaves people vulnerable when the economy suddenly crashes, as it did in spring 2020 after the arrival of the COVID-19 pandemic led to widespread shutdowns.

If the bill had been law in spring 2020, the jobless only could have collected 14 weeks of benefits, because the index would have been based on the average unemployment rate from fall 2019 of 4.1 percent, according to an analysis by the Kentucky Center for Economic Policy.

"This scheme would have been especially catastrophic for many Kentuckians at the depths of the COVID-19 downturn," the center said in its analysis.

And lawmakers from poorer parts of the state, such as Eastern Kentucky, protested Thursday that using a statewide unemployment average is unfair to their communities, where local conditions can be much worse. Rep. John Blanton, a Republican who represents Knott, Magoffin and Pike counties, unsuccessfully tried to block the legislation's shortened time limits Thursday with motions on the House floor.

In parts of his district, there simply aren't enough good jobs available no matter how much pressure you exert on people to go fill out applications, Blanton said.

"For the people of my district, for the people of my region, let me beg of you not to do this," Blanton said.

Reporting Job Refusals

The bill would let the jobless add five more weeks of benefits, not to exceed 26 weeks overall, if they enroll in an approved job training or certification program, with an emphasis on high-wage and high-demand occupations.

But it also would set stricter eligibility standards for keeping benefits. Instead of one job search activity per week, people would have to complete five verifiable job search activities, including at least three job applications or job interviews. Other activities could include job fairs or seminars.

And under the bill, after six weeks on benefits, people would have to consider employment offers to be suitable if the jobs were within 30 miles of their homes; if they were capable of doing the job, regardless of their experience or training; and if the jobs paid up to 120 percent of their weekly benefit amount.

The bill would create a method for employers to report people to the state if they don't accept a suitable job offer or if they miss a job interview. The reports could be used to strip people of their eligibility to continue collecting jobless benefits.

"You have individuals across the state that are in need of employees, and folks simply are not applying right now for work," the bill's sponsor, Rep. Russell Webber, R- Shepherdsville, told the committee.

"Many times when they do have applications, they schedule interviews, but folks do not show up for interviews," Webber said. "And on job refusals, when someone is looking for and offered a suitable job and refuses, that refusal should be noted."

One part of the bill that seems to enjoy bipartisan support would allow employers to avoid layoffs by offering a "shared work plan" that reduced hours for employees, who could collect jobless benefits reflecting their loss of pay while keeping certain workplace benefits, such as health coverage and retirement plans.

(c)2022 the Lexington Herald-Leader (Lexington, Ky.) Distributed by Tribune Content Agency, LLC.
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