Eligibility for unemployment benefits would be reduced by seven weeks – from 20 to 13- under a proposal now being considered by Missouri lawmakers.
The measure would also requires more money to be in the state’s unemployment trust fund before employers get a discount on their contributions into it.
Tracy King with the Missouri Chamber of Commerce, which supports the proposal, says it’s meant to protect the trust fund from recession shortfalls.
“If we shore up the trust fund, we provide that safety net that’s there’s for the employees who are laid off through no fault of their own” said King. “The money will be there so that we don’t have to borrow that money back at the next recession.”
King says Missouri has had to borrow money from the federal government in each of the last five recession when the unemployment trust fund had more money going out than was being paid in through employer taxes. Employers then had to pay interest on the borrowed money.
Under the measure, the fund would have to reach a reserve level of about $120 million above the current benchmark before employers would receive the scheduled seven percent discount on their tax contributions. A second threshold where the rate would be further reduced to 12 percent would also be raised by $120 million.
King maintains the proposal requires sacrifices from both employers and workers. Other business groups, including the National Federation of Independent Business, support the plan.
Opponents say the reduced number of weeks for unemployment pay would leave workers vulnerable. . Mike Louis with the AFL-CIO union argues older workers would be especially vulnerable under the plan.
“At a time when someone my age, speaking about a good number on your birthday, hits unemployment, there are not a lot of employers willing to hire someone” said Louis. “And you could go well beyond 10 weeks, 13 weeks, 15 weeks, 18 weeks.”
The proposal calls for a sliding scale of available weeks for unemployment benefits, triggered by the jobless rate. If the rate was nine percent or higher, workers would receive 20 weeks of benefits. The eight graduated levels would bottom out at 13 weeks when the rate is under six percent. The state’s current rate is 4.7 percent.
King, with the Missouri Chamber, says very few workers would be affected by the reduction. “In 2016, the average duration of weeks for unemployment was 12.4. So currently as of last year, the average person was taking less than 13 weeks of unemployment because of our unemployment rate being so low.”
The measure was originally passed in 2015, but was vetoed by then Democratic Governor Jay Nixon. Both the House and Senate overrode the veto, although the Senate’s action occurred during a later meeting of the legislature known as the “veto session”.
In the spring of 2016, the state Supreme Court disallowed the Senate’s override, leading to the current effort led by Republican lawmakers to pass the plan into law. Two separate, but similar proposals, are under consideration in the House and the Senate.
It’s also one of a number of pro-business measure moving through the current session. It’s not expected to be opposed by newly elected GOP Governor Eric Greitens.