States explore huge benefit cuts to spur people to take jobs

Several states are taking steps to dramatically reduce unemployment benefits for out-of-work Americans in an attempt to force people to fill thousands of open jobs. 

Republicans are leading efforts across the country to trim back jobless aid, a move that comes as companies complain about a lack of available workers to fill typically lower wage positions. 

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Lawmakers in Iowa, Kentucky and West Virginia are moving forward with plans to aggressively reduce how many weeks of unemployment pay workers are eligible for from 26 weeks to less than 10 weeks. 

There are only six states that have such severe limits (40 states pay up to 26 weeks of unemployment benefits): Arkansas and Kansas pay 16 weeks, while Alabama cuts off benefits after 14 weeks. In Florida, the unemployed are eligible for just 12 weeks of jobless pay. Georgia also offers 14 weeks of benefits, while North Carolina provides up to 12 weeks.

There are a near-record number of open jobs in the economy, according to a Labor Department report released this week, with roughly 11.3 million available positions at the end of February. That means there are roughly 5 million more openings than there are workers – or about 1.8 jobs per unemployed person. 

Here is a closer look at the states considering slashing jobless benefits – and what the proposals could mean for unemployed Americans.

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Iowa 

Republican Gov. Kim Reynolds has made benefit cutbacks a priority, arguing that such programs are too generous and discourage Americans from working. 

One measure – supported only by Republican lawmakers – would reduce allowable unemployment payments from 26 weeks to 16 weeks. 

The maximum unemployment payment in Iowa is $531 per week for individuals with no dependents; for comparison's sake, that's about $27,500 annually, or close to double Iowa's minimum wage ($7.25 per hour). 

The proposal comes as Iowa's unemployment rate dropped to 3.5% in February, although there are an estimated 86,000 open jobs in the state.  

Democrats have fiercely opposed the bill, arguing that just one-third of open jobs pay a livable wage for a family of four.

"You are breaking something that is working for Iowans," said Democratic Sen. Janet Petersen. "This bill is heartless."

Kentucky

Republicans in Kentucky have taken a similar approach to Iowa: Last week, GOP lawmakers in the state voted to override Democratic Gov. Andy Beshear's veto of an unemployment measure that would cut benefits from 26 weeks of eligibility to as few as 12 weeks. 

Kentucky, which has a current unemployment rate of 4.2%, offers a maximum of $552 in weekly benefits to the unemployed, about double the weekly minimum wage salary.

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Supporters of the bill, known as HB 4, say it's needed to boost workforce participation and help struggling businesses fill vacant job openings. Critics say the legislation would hurt the unemployed who lost their job through no fault of their own and are having difficulty finding a new role.

"Sure, most people are well intended," Republican Sen. John Schickel said of the measure. "But to suggest that some folks don't abuse the system, I just don't think is reality. And I think we all know that in our hearts."

West Virginia

The West Virginia Senate passed a bill in early February that would limit unemployment pay to 12 weeks from the current 26 and implement work requirements so that recipients must prove they are searching for a job. 

If the unemployment rate in the state increases, the jobless benefits could be extended to up to 20 weeks.

"We need to make our unemployment compensation system less expensive," Republican Sen. Charles Trump said of the bills. "That's a big part of being able to grow business."

Critics slammed the bill and noted that it does not account for transportation or child care issues that could impede the job hunt.

"This is kicking a man when he's down," Democratic Sen. Mike Caputo said. "This is kicking a man or woman when they are hurting the most. "

West Virginia, which has a current unemployment rate of 3.9%, offers a maximum of $424 in weekly benefits to the unemployed. That compares to the state's weekly minimum wage of about $328.