Louisiana lawmakers are considering a proposal to cut unemployment benefits by half for those who lose their jobs, a move that some say would disproportionately affect low-income workers. House Bill 340, sponsored by Republican Rep. Troy Romero, would reduce the maximum duration of unemployment benefits from 26 weeks to 12 weeks, based on a sliding scale indexed to the state's average unemployment rate. Under the proposed legislation, recipients would be entitled to an additional week of benefits for every half-percentage point increase in the average unemployment rate over 5%, with a maximum of 20 weeks of benefits if the average unemployment rate is equal to or greater than 8.5%.
Romero said he wants to reduce the unemployment taxes businesses pay and shore up the state's unemployment trust fund. Louisiana's GOP lawmakers have continuously filed legislation to reduce worker benefits over the last few years. Critics of the proposal, including Louisiana Workforce Commission Deputy Secretary Margaret Mabile, say the bill will mostly hurt low-income workers who are currently employed and may need assistance until they can get re-employed.
The current 26-week allowance gives laid-off workers time to find training and increase their skills to find better employment, Mabile said. She added that the proposal would push many low-income workers back into poverty and into a workforce that does not make any exemptions for the cost of going to work. Employers will not save any money under the proposed legislation. She said that the state will pay out smaller amounts in unemployment benefits but won't be able to use that money for other things because it will pile up in the restricted unemployment trust fund.
LWC Secretary Ava Cates said the proposal's most significant consequences would happen during times like the pandemic that cause unemployment rates to spike quickly. She said that laid-off workers would be locked into fewer benefits for an entire year based on unemployment rates of the previous month. Unemployment rates also differ significantly according to geographic areas within the state, with metropolitan areas having significantly higher rates than other parts of the state. According to the National Employment Law Project, sliding-scale programs like Romero is proposing disproportionately hurt communities of color.
Republicans on the committee remain unconvinced by the LWC leadership's testimony. Romero said that if the proposal is approved, lawmakers could enact new legislation to use the money or lower the unemployment tax rates. He believes the proposal will improve the state in the long run. "I think in the future, and the state's going to be better off by doing this, I really believe…Once it's in place, I think you'll see some positive results," he said.