Proposal Aims to Cut Jobless Benefits During Economic Booms

Arizona lawmakers are considering a significant reduction in the duration of unemployment benefits for workers laid off or fired without cause. This proposal, recently cleared by the House Commerce Committee along party lines, aims to shorten the eligibility period for unemployment insurance, a move that could financially benefit employers by lower premiums.

Currently, laid-off workers can receive up to 24 weeks of benefits, increasing to 26 weeks if the state jobless rate exceeds 5%. However, House Majority Leader Michael Carbone’s bill, HB2450, proposes limiting these benefits to as little as 12 weeks when the unemployment rate is 5% or lower. As it stands, Arizona’s unemployment rate is 3.8%.

Under the new legislation, longer benefits would only be available if the unemployment rate rises significantly, reaching over 8% for the maximum 26 weeks. This change raises concerns, especially considering Arizona’s jobless rate spiked to 13.8% during the COVID-19 pandemic, and previously reached nearly 10% during the recession from 2008 to 2010.

Despite the state currently having 190,000 job openings, Carbone argues that a shorter benefit period is warranted when jobs are available. He emphasizes that the unemployment insurance trust fund’s sustainability is at stake, stating, “If you lose your job and it’s a good market, you’re probably going to find a job.”

Critics of the bill express concern that not all workers can easily transition to new jobs, especially those who face unique challenges in employment. Lobbyist Brenda Furnich pointed out that displaced workers often need time to find appropriate roles that match their skills and experience.

Moreover, representative Walt Blackman highlighted the varying unemployment rates across the state, noting that in some areas, finding a new job can take longer. He acknowledged the struggles of constituents in his community who find job searching to be a prolonged process.

The proposed changes come amid a system where unemployment benefits are not taxpayer-funded but sourced from employer contributions based on job turnover rates. Employers who maintain stable workforces contribute less compared to those with higher layoffs.

Even if the legislation goes through, it may not address the significant number of open jobs. Current estimates reveal that less than 22,000 individuals are currently receiving unemployment payments, leaving a substantial gap in the workforce.

As the full House prepares to vote on HB2450, the implications of this legislation remain a contentious issue among lawmakers, employers, and workers alike.