HB 252: one of the worst of the bad

By BILL LONDRIGAN

Kentucky State AFL-CIO president

Of the many bad bills being filed this session HB 252 is one of the worst and will have a dramatic negative effect on unemployment benefits.

We have worked with the Kentucky Center for Economic Policy to develop some talking points—see below--which can be distributed and used to inform our members what HB 252 will do to Kentucky’s UI system. 

HB 252 is in the Economic Development and Workforce Investment Committee and is not on the agenda for today’s session but this bill merits our close attention and calls to legislators before it gets a committee hearing. 

So please read the following talking points and you will see how HB 252 will turn back the clock on Kentucky’s unemployment insurance program. 

Please let me know if you have any questions. 

Workers’ maximum weeks receiving unemployment insurance (UI) benefits would be slashed up to 46%:  from 26 weeks to as low as 14 weeks.

•  Most Kentucky beneficiaries of UI don’t use the maximum now, with an average of only 18.8 weeks of benefits, but those who need it face barriers to employment.

Communities with too few jobs and industries that have faced downturns would be particularly hard hit.

•  Rural counties that have lost coal, manufacturing and other jobs would be especially disadvantaged. For example, in October 2014 Kentucky’s unemployment rate was 5 percent, which would cut maximum weeks from 26 to 14 under HB 252. But the unemployment rate at that time was 10.8% in Harlan County, 10.5% in Magoffin County, 10% in Letcher County, and 9.7% in Leslie and Russell County.

•  Some industries have had more layoffs than others, and their workers would be hardest hit even while jobs in that industry are scarcest:

•  UI helps keep communities facing layoffs from falling further into hard times, but its effects would be weaker under HB 252. During the Great Recession and recovery, $2 in economic activity was generated for every $1 in UI benefits paid.

HB 252 freezes maximum benefits and excludes more workers, even though current benefits are already modest and hard to get.

•  UI benefits in Kentucky are only an average of $322.48 per week, or 38 percent of previous earnings. Freezing the maximum would erode its value relative to actual wages.

•  HB 252 further lifts the minimum income to be eligible for UI benefits and will result in more workers with fluctuating income being denied benefits. Already, only 19 percent of the unemployed Kentucky workforce receives UI benefits.

Kentucky has already taken actions to build its unemployment insurance trust fund and make our benefits reasonable and sustainable.

•  The General Assembly passed legislation in 2010 based on recommendations of a task force made up of labor and management that cut benefits and put them on a path to sustainability.

•  Kentucky’s Trust Fund is currently funded at $428,304,000 with no outstanding loan balance from what we borrowed during the recession.

•  When Kentucky paid off the loan to the U.S. Treasury, the employer contribution rate fell, and is now only 0.75 percent of total wages. HB 252 Cuts Vital Benefits Short, Freezes Maximum Benefits and Hurts Local Economies

Workers’ maximum weeks receiving unemployment insurance (UI) benefits would be slashed up to 46%:  from 26 weeks to as low as 14 weeks.

• Most Kentucky beneficiaries of UI don’t use the maximum now, with an average of only 18.8 weeks of benefits, but those who need it face barriers to employment.

Communities with too few jobs and industries that have faced downturns would be particularly hard hit.

• Rural counties that have lost coal, manufacturing and other jobs would be especially disadvantaged. For example, in October 2014 Kentucky’s unemployment rate was 5 percent, which would cut maximum weeks from 26 to 14 under HB 252. But the unemployment rate at that time was 10.8% in Harlan County, 10.5% in Magoffin County, 10% in Letcher County, and 9.7% in Leslie and Russell County.
• Some industries have had more layoffs than others, and their workers would be hardest hit even while jobs in that industry are scarcest:

• UI helps keep communities facing layoffs from falling further into hard times, but its effects would be weaker under HB 252. During the Great Recession and recovery, $2 in economic activity was generated for every $1 in UI benefits paid.

HB 252 freezes maximum benefits and excludes more workers, even though current benefits are already modest and hard to get.

• UI benefits in Kentucky are only an average of $322.48 per week, or 38 percent of previous earnings. Freezing the maximum would erode its value relative to actual wages.
• HB 252 further lifts the minimum income to be eligible for UI benefits and will result in more workers with fluctuating income being denied benefits. Already, only 19 percent of the unemployed Kentucky workforce receives UI benefits.

Kentucky has already taken actions to build its unemployment insurance trust fund and make our benefits reasonable and sustainable.

• The General Assembly passed legislation in 2010 based on recommendations of a task force made up of labor and management that cut benefits and put them on a path to sustainability.
• Kentucky’s Trust Fund is currently funded at $428,304,000 with no outstanding loan balance from what we borrowed during the recession.
• When Kentucky paid off the loan to the U.S. Treasury, the employer contribution rate fell, and is now only 0.75 percent of total wages.