A bill limiting unemployment benefits for Kentuckians passed out of a Senate committee Tuesday despite bi-partisan concern that the bill could harm unemployed Kentuckians and their communities.
House Bill 4 would add new work search requirements, reduce the number of weeks Kentuckians can collect unemployment benefits and tie those benefits to the unemployment rate, which could further shorten the time frame Kentuckians are eligible for the money.
The measure passed 6-4 in committee and now moves to the Senate floor for a vote.
During a senate economic development committee hearing, opponents called the bill an ”immoral” and “inhumane” effort to force people back to work for lower wages.
Supporters, including bill sponsor Rep. Russell Webber, a Republican from Shepherdsville, say the bill would not be a “silver bullet” for Kentucky, but would encourage worker participation and bolster the state’s unemployment trust fund.
“My goal is to see the trust fund solvent and to help workers by re-entering the workforce,” Webber said.
The bill would reduce the maximum unemployment Kentuckians can receive from 26 to 24 weeks, but it would also tie the benefits to the unemployment rate — meaning that when the state’s employment rate is less than 4.5%, as it is now, a person could only collect benefits for a maximum of 12 weeks.
The concept, known as indexing unemployment, has become increasingly popular among conservative groups including the Foundation for Government Accountability and has been passed into law in states including Florida, Georgia and North Carolina. West Virginia is considering similar legislation.
Kentucky’s Chamber of Commerce endorsed Kentucky’s bill as a solution to the state’s low workforce participation, the third lowest in the nation according to a report the chamber published last year.
Katie Shanks, Kentucky Chamber of Commerce vice president of public affairs, said the state’s low workforce participation is a multi-faceted problem that will require a number of solutions, but House BIll 4 would help.
“A robust economy is not sustainable when nearly half of the working age population is not working,” Shanks said. “We know that people look for work more intensely when they know their benefits are going to run out.”
Opponents of the measure included Republicans and Democrats, and faith and labor leaders. Several of them described the measure as a ruthless attempt to force Kentuckians back to work for low wages.
President of the Kentucky State AFL-CIO, Bill Londrigan, said similar laws in other states have not boosted the labor force. He said slashing benefits in Kentucky would result in more hardship for unemployed workers and their communities.
“[Unemployment insurance] benefits are spent at the local grocery store, gas station and pharmacy and to pay essential heating, water and mortgage payments,” he said. “By cutting the number of weeks of benefits less money will be spent in local economies.
Republican Sens. Adrienne Southworth of Lawrenceburg and Phillip Wheeler of Pikeville were among those who voted against the measure.
“This is a very cruel bill. I think it hurts areas of Kentucky that have already been suffering,” Wheeler said. “It addresses a problem that is really not a workforce participation problem. These are people that actually worked in this economy and are entitled to these benefits.”
Wheeler is one of several Republicans from Eastern Kentucky who have spoken against the bill. They say it would disproportionately hurt their districts, which generally have higher unemployment rates than the state average.
Democratic Sen. Reginald Thomas of Lexington said states that have the highest unemployment benefits have the highest worker participation rates. He said it wouldn’t be right to cut benefits for workers in the wake of the pandemic.
“That’s just plain right immoral,” Thomas said.