Legislation that slashes unemployment benefits by half gets support of Senate committee

Payments would reduce from 26 weeks to 12 weeks but increase by $30

Gov. Edwards will likely approve early end to unemployment supplement
Residents ask for an increase in state unemployment benefits during a rally at the Louisiana Capitol.

A Senate committee approved a bill Thursday that would cut unemployment benefits in Louisiana, leaving laid-off workers to collect about half the total amount they are eligible for under the current program in exchange for an extra $30 per week.

Senate Bill 225, sponsored by Sen. Mike Reese, R-Leesville, proposes multiple formulas that tie an individual’s unemployment benefits to both the trust fund balance and the state’s economic performance during a particular time period. The bill proposes to cut the duration of unemployment benefits to 12 weeks of payments instead of the 26 weeks allowed under current law. In exchange, the bill would increase the weekly payouts by $30.

The Senate Labor and Industrial Relations Committee approved the bill unanimously.

Under current law, a laid-off worker is eligible to receive a maximum of $6,422 in unemployment. The current duration of benefits provides up to 26 weeks of payouts at $247 per week. 

Under Reese’s bill, individuals would be eligible for a much lower maximum of $3,324. This would include 12 weeks of payments at a slightly higher $277 per week.

The 12-week duration could be extended up to a maximum of 20 weeks if a worker participates in a training program approved by the Workforce Commission, but when asked, Reese could not say who would pay for the training programs.

“There’s no training program in Jonesboro, Louisiana, that’s in my district,” Sen. Jay Luneau, D-Alexandria, said. “The point is there are a lot of rural areas that have none of that. How are these people going to get that training?”

“I think that merits a much further conversation, and it’s one of the many things that I’d like to continue to work on on this bill to make sure that we have the proper answers to that,” Reese said.

Testifying in support of the bill was Joe Horvath with the Foundation for Government Accountability, a national lobby that opposes Medicaid, unemployment and other federal programs. The group spearheaded a movement to kick 3.1 million people off food stamps by, among other things, holding classes that taught state legislators ways to suggest food stamp programs were full of fraud, according to a Vox Media article.

So far three other Southern states, Florida, Georgia and North Carolina, have enacted versions of Reese’s bill since the Great Recession of 2008 depleted their unemployment trust funds, Horvath said.

“Like Louisiana today, their trust funds were deep in the red, and they were dependent on borrowing from the federal government,” Horvath said.   

Prior to the pandemic, Louisiana’s unemployment trust fund was flush with more than $1 billion and was depleted by the end of 2020. Claims increased by 2000% due to the novel coronavirus. Between March 2020 and December 2020, $6.87 billion in payments were made to 694,391 people, according to the Louisiana Legislative Auditor.

Juan Cruz with Step Up Louisiana testified against the bill. Cruz said he built his career with a very specialized skill set as a management consultant with health and human services companies. Since he lost his job last summer, he has been unable to find work that matches his skills, he said.

“Making workers take the first job that comes along means a waste of their skills and experience,” Cruz said. “In my case, 12 weeks would lead to a misallocation of skill and experience. Please do not support this bill.” 

Caleb Holmes, also with Step Up Louisiana, said a shortened period of unemployment benefits would force workers to accept jobs that do not match their skills, which would lead to unproductive and unprofitable companies.

“When you have a mismatch of skills, workers become ineffective, unproductive, and when they become ineffective and unproductive, so do our small businesses and companies,” Holmes said. “They become unprofitable, ineffective, inefficient. This legislation would make this problem worse.”

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