Florida's HB7005 - An Argument For H.R 589?
The Florida State Legislature is considering a bill, HB 7005, that will restructure state unemployment insurance benefits.
By "restructure" we mean "cut back". (This is the same state that wanted to require its unemployed to perform mandatory volunteer service in exchange for benefits.) Key features of the bill:
- State unemployment benefits would be cut from 26 to 20 weeks.
- If Florida's unemployment rate drops to 5%, the state would limit benefits to 12 weeks.
- Employers will have new authority to challenge a fired or laid-off worker's claim.
Let's focus on issue 2: the state is proposing to tie unemployment benefits to the state's unemployment rate. As the unemployment rate goes down, so do benefits.
You can see where the case could be made: if the demand for workers creates a "full employment" situation (which is typically defined as 3-4% unemployment), then the odds of a worker finding a replacement job increase and the need for a full maximum of 26 weeks of unemployment benefits would decrease.
It would be nice to see if the legislators arrived at the 5 percent/12-week figures based on studies of past business cycles, but what's more important is this:
By making the argument that unemployment benefits can be reduced when unemployment is low, the Florida state legislature is also arguing for the converse: that unemployment benefits can be extended when unemployment is high.
That point alone should argue against cutting back the maximum limit on benefits by six weeks, or 23% - currently, Florida had the nation's third-highest unemployment rate at 11.9%
The argument that both advocates and opponents are making is actually quite similar: unemployment benefits should be targeted and temporary.
Opponents frame the issue in terms of time, however, and argue that 99 weeks should suffice for everyone. Why, exactly? What's so special about 99 weeks? Do opponents understand that benefits are already tied to unemployment rates? The EB program is either 13 or 20 weeks, based on a state's unemployment rate. Likewise, the EUC program uses multiple tiers of benefits, also tied to a state's unemployment rate. The higher the rate, the longer the benefits last, as seen here:
Advocates, on the other hand, argue that as long as the unemployment crisis exists, and as long as the demand for workers remains at historically low levels, the need for the financial lifeline of unemployment benefits also exists. In fact, the need for that lifeline is greater when times are bad, like now. H. R. 589 simply acknowledges a plainly evident fact: that the unemployment crisis is still with us, and because of that, the need to extend the financial lifeline of unemployment benefits is just as strong today after 99 weeks than it is before that arbitrary period.