From KCEP: New Bills Would Slash Unemployment Insurance and Leave Kentuckians Stranded
Kentucky Center for Economic Policy
New bills filed in both the Kentucky House and Senate would severely cut unemployment insurance for Kentuckians who lose their jobs, reducing benefits by 20 percent for the average unemployed worker. Unemployment insurance helps workers get by while looking for another job by replacing a portion of lost wages. While Kentucky’s benefit is not very generous, replacing less than half of wages on average, it provides critical support that keeps local economies afloat and helps workers continue building a career.
Unemployment insurance helps Kentuckians stay on their feet while looking for a job
Unemployment insurance (UI) is a modest benefit. Currently, only one in five unemployed Kentuckians receive UI, and they can draw on those benefits for up to 26 weeks — but only a third of claimants are unemployed for that long. The benefit is based on a percentage of the wages earned over the previous year, and only replaces roughly 45 percent of what the average claimant earned prior to being laid off.
Having this income support helps workers get by while looking for a job within their career field. It is not enough, however, to serve as a disincentive to claimants seeking a new job. Using the Economic Policy Institute’s Family Budget Map, a 2 parent, 2 child household in Montgomery County needs a weekly income of $1,245 to have a modest but secure standard of living. Using the state-wide average weekly benefit amount ($340.66), UI would only meet 27 percent of that family’s need. It covers only 56 percent of the cost of living for one adult with no children.