Iowa, Kentucky, and West Virginia Considering Major Unemployment Benefits Cuts to Force Americans Into Workforce

by TK Sanders
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(Photo by Scott Barbour/Getty Images)

Multiple U.S. states will likely soon make sweeping cuts to unemployment benefits programs as lawmakers try to force Americans into the workforce. Currently, thousands of open jobs exist across the country — almost two for every one unemployed American, according to the latest jobs report.

At a glance

  • The U.S. economy is adding jobs quicker than workers can fill them, which is causing a strain on businesses
  • Some Republican states want to drastically cut unemployment benefits in order to encourage workers to take jobs
  • Democratic lawmakers in the states call the different proposed measures “heartless” and unneeded

A few red states like Iowa, Kentucky, and West Virginia want to make cuts to their unemployment benefits programs in order to fill those employment gaps. Many companies currently complain about a lack of available workers, especially in lower-wage positions.

Republican leadership in these states want to aggressively reduce unemployment eligibility from 26 weeks down to 10 weeks or less. The vast majority of the country pays 26 weeks in benefits currently; only six states offer less time. Arkansas and Kansas each pay 16 weeks, while Alabama and Georgia cut off benefits after 14 weeks. Florida and North Carolina head up the rear with 12 weeks offered each.

If Iowa, Kentucky, and West Virginia successfully pass their legislation, they would then offer the least unemployment in the nation.

The U.S. Labor Department reported roughly 11.3 million available positions at the end of February in their assessment.

In Iowa, Republican Gov. Kim Reynolds said unemployment benefits cuts are a priority because the programs discourage Americans from working. Last summer, she halted an additional $300-a-week federal unemployment benefit three months early. She claimed the benefit was contributing to a labor shortage, the AP reports.

“The safety net has become a hammock,” she told lawmakers earlier this year.

Unemployment benefits cuts face Democratic opposition in all three states

The proposed reduction, which is expected to be approved soon, comes as Iowa’s unemployment rate dropped to 3.5 percent in February. “You are breaking something that is working for Iowans,” said Democratic Sen. Janet Petersen. “This bill is heartless.”

In Kentucky, Republican legislators voted to override the Democratic governor’s veto of a similar bill. The state, which has a current unemployment rate of 4.2 percent, offers a maximum of $552 in weekly benefits to the unemployed. The benefit works out to about double the weekly minimum wage salary.

Critics say the legislation will hurt the unemployed who lost their job through no fault of their own; or are having difficulty finding a new job in their field. Many lawmakers support the bill, though.

“Sure, most people are well intended,” Republican Sen. John Schickel said. “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 also finds itself in a similar position as Kentucky. The Mountain State has a current unemployment rate of 3.9 percent and offers a maximum of $424 in weekly benefits to the unemployed. The state’s weekly minimum wage sits at about $328.

“We need to make our unemployment compensation system less expensive,” Republican Sen. Charles Trump said. “That’s a big part of being able to grow business.”

Democratic Sen. Mike Caputo disagreed. “This is kicking a man or woman when they are hurting the most,” he said.

Outsider.com