We must increase unemployment insurance benefits without caveats

Long before the Covid-19 pandemic wreaked havoc on our state’s economy, Louisiana workers who lost their jobs through no fault of their own were stuck with some of the lowest unemployment benefits in the country. 

Louisiana’s maximum weekly benefit of $247 is the third lowest in the nation, behind Mississippi and Arizona. But most unemployed Louisianans receive even less. Louisiana’s average weekly unemployment benefit has hovered around $190 in 2021, which is the lowest in the nation.

The Legislature is considering two bills to address this issue. While both bills would raise the weekly benefits that people can receive after losing their jobs, each of them also have serious flaws that would hurt people at a time when Louisiana still has a long way to go before it fully recovers from the pandemic recession. 

In the early months of the pandemic, unemployed Louisianans received a $600 per week boost in their state benefits from the federal government – an enhancement that kept many families financially afloat and helped the overall state economy. But that benefit boost expired in July 2020. Unemployed people currently receive an extra $300 per week in federal support, an enhancement that is scheduled to expire in September. 

Without the federal boost, Louisiana’s state unemployment benefits aren’t nearly enough for people to make ends meet after losing their job. Two bills are working their way through the Legislature that attempt to address this problem. Both bills are imperfect and contain amendments that would potentially harm unemployed workers.

Senate Bill 225 would raise the top weekly benefit from $247 to $277. But it cuts in half the maximum number of weeks that workers can receive benefits as soon as the state’s unemployment rate falls to 5.5% or below for two consecutive quarters. After that, the benefit timeframe would be on a sliding scale from 12 weeks to 20 weeks. Workers could get an additional eight weeks of benefits if they enroll in a state-approved workforce training program. 

While raising the maximum benefit is a long-overdue policy change, cutting the number of weeks that people could stay on unemployment is a terrible trade-off that prioritizes the corporations that pay into the state’s unemployment insurance trust fund over the Louisianans who depend on the unemployment system after they lose their job. 

Reducing how many weeks workers can receive unemployment benefits will not make people find a job faster; it only cuts off a meager financial lifeline for people who are looking for a job, or forces them to take work that they are overqualified for. In February 2020, when unemployment was near an historic low, one-third of unemployed people still needed 15 weeks or more of benefits before they became gainfully re-employed.

While worker training programs are critical to economic growth, they are not a substitute for adequate unemployment insurance benefits that allow people to weather economic downturns and periods of unemployment. Not every worker needs to be retrained every time they lose their job; most people just need enough time to match with an employer that is looking for their skillset. 

Tying the duration of benefits to Louisiana’s unemployment rate also neglects the variations in the job market between different regions of the state. Just because unemployment is low in one part of the state or Louisiana as a whole does not mean that all regions of the state are thriving. People in low-income and rural areas – with higher Black populations – often struggle to find jobs even during times when the overall economy is healthy.   

In January 2020, for example, the unemployment rate in Baton Rouge was 4.7%, but in Bastrop the jobless rate was more than double at 9.7%. Had the new formula contemplated in Senate Bill 225 been in effect, people who lost their job in Bastrop would have been limited to 12 weeks of benefits even though their local economy was struggling. 

House Bill 610 would raise the maximum weekly unemployment from $247 to $275, without reducing the number of weeks people can receive benefits. But an amendment added in committee creates a “back-to-work enhancement program” that would pay bonuses to workers who return to work after collecting unemployment benefits. While bonuses are not problematic, they feed into the false narrative that people would rather collect unemployment than return to work. This bill has since failed on the House floor. 

People who receive a return-to-work bonus would be barred from receiving unemployment benefits for 26 weeks after accepting the bonus. This means people who return to work and then lose their job after a few weeks would be shut out from assistance. Because Louisiana is a right to work state, employers can dismiss their employees at-will without giving notice or reason. This worker is then barred from unemployment benefits despite again being unemployed through no fault of their own. 

The bonus also creates potential administrative problems. Unemployment benefits are paid from a state trust fund and are calculated using a complex formula that accounts for prior wages, time worked and other factors. The trust fund does not exist to pay out bonuses and implementing this policy through the trust fund may not be feasible. 

There is a simple solution to these problems that legislators should consider: raise Louisiana’s unacceptably low unemployment benefits without conditions.