The Iowa House and Senate approved similar bills on March 23 that would substantially cut unemployment benefits for jobless Iowans. The legislation, a priority for Governor Kim Reynolds, had been stalled for weeks, raising questions about whether Republican leaders could find the votes to pass it in the House.
Both versions of the legislation include the centerpiece of the proposal Reynolds highlighted during her Condition of the State address in January: reduce the maximum unemployment benefits in one year from 26 weeks to sixteen weeks. Currently, most states provide up to 26 weeks of unemployment benefits per year, while only a handful of states provide a maximum of sixteen weeks or fewer.
The revised bill, House File 2355, also includes provisions that would force Iowans to accept new jobs for lower pay sooner, and would make it easier for Iowans to be denied benefits entirely.
A House amendment offered by State Representative Mike Bousselot removed language that would have denied Iowans benefits the first week they were unemployed. Senate Republicans put the one-week waiting period back in the bill before approving it.
All House and Senate Democrats voted against the bills, as did two Republicans in each chamber: State Representatives Martin Graber and Charlie McClintock, and State Senators Zach Nunn and Jeff Reichman.
SQUEEZING JOBLESS IOWANS IN MANY WAYS
While presenting the House amendment, Bousselot said it would "modernize" the unemployment system. Echoing language used by Reynolds, he said the changes would "refocus unemployment on reemployment," and "update the number of weeks to reflect the labor market employers and workers are facing."
Democratic State Representative Chris Hall joked that Bousselot's description reminded him of an old George Carlin routine about how American language is often used to obscure the truth: in this case, that a lot of people are going to get screwed.
Many Democrats mentioned that Iowa's Unemployment Trust Fund has a healthy balance, so there is no fiscal reason to cut benefits. In addition, many emphasized that unemployment benefits are only for people who lose their jobs "through no fault of their own." So by definition, the Iowans adversely affected by the bill are not to blame for their unfortunate situation, and have earned those benefits. Yet Reynolds has portrayed jobless people as lazy, using the system as a "hammock."
Eligibility window shortened
Both the House and Senate bills would reduce the length of time Iowans could receive unemployment benefits in a single year from 26 weeks to sixteen weeks.
Under both versions of the bill, Iowans who become unemployed due to a business closure would be able to collect at most 26 weeks of benefits, whereas current law allows for 39 weeks under such circumstances. When a factory or other large employer shuts down, it can be much harder for people to find new work, especially in smaller communities.
Democratic lawmakers pointed out that the shortened eligibility would keep an estimated $100 million from going to jobless Iowans each year. The change would benefit large companies while hurting local businesses, because claimants are likely to spend all of their unemployment benefits quickly on goods and services in their communities.
Many Democrats also argued that this approach was misguided, since research (including a Wall Street Journal analysis) shows states like Iowa, which ended federal pandemic-related unemployment benefits early, had slower job growth than states where residents were allowed to collect those benefits for several more months.
Both versions of the bill define "misconduct," which makes a fired employee ineligible to collect unemployment benefits. Most of the language comes from current administrative rules. Bousselot said it was important to codify the language, because the administrative law judges who decide most unemployment disputes are not bound by precedent (what previous ALJs have done).
Democratic State Representative Mary Wolfe raised concerns that the bill would allow employers to fire workers for any misdemeanor infraction. Even if the crime happened months earlier, it could be cited as a pretext for the dismissal. Nothing in the bill requires the crime to have affected the employee's work or caused the person to miss time at work. So an employee arrested and jailed on a public intoxication charge over a weekend, or while on vacation, could be fired and would have no way to collect unemployment benefits. (Wolfe noted that Iowa is one of the few states where you can be arrested for public intoxication if you're walking home to avoid driving while drunk.)
Pushing Iowans toward lower pay
Both versions of the bill would force Iowans to accept lower-paying jobs sooner. This explanation and table come from a bill summary prepared by Iowa House Democratic staff.
Skilled workers (such as carpenters or construction workers) rely on unemployment benefits to get through the periods when there is no work. Many Democrats warned that those workers will be less likely to stay in Iowa, knowing the state will force them into low-paying jobs over the winter, rather than letting them collect the benefits they have earned. Many will move to a state that provides unemployment benefits during the off-season.
Democratic State Representative Sue Cahill laid out other possible unintended consequences of forcing workers to take a job that pays at least 60 percent of their former wage after only two months of looking for a job.
Does her rent go down by 60 percent? Does her car payment go down by 60 percent? Does her child care cost go down by 60 percent?
No. But now she needs to apply for other public programs, such as the nutritional SNAP program, the insurance HAWK-I program, to meet her children's needs, and child care assistance, and other programs, even though our wage worker is working full time--but at 60 percent of her previous and former wage.
Soon she realizes that she can use public programs, sponsored federally and by the state, to stay home with her family. So she eliminates child care. Eliminates extensive use and paying for gas for her car for traveling to work.
Her employer is now without an employee. [...] But our worker realizes she can't afford to work at 60 percent of her former wage. She's not lazy. She's just practical.
Direct appeals to District Court
Both versions would allow parties to appeal an administrative law judge's decisions directly to a District Court, without going through the Employment Appeal Board first.
Democratic State Senator Nate Boulton argued that this provision would increase burdens on the court system. It would also benefit corporations with deep pockets. In contrast, unemployed people are unlikely to have the funds to hire an attorney to represent them.
Both bills would give employers a break if they didn't respond to Iowa Workforce Development about an overpayment of unemployment benefits through no fault of their own. But claimants would not receive the same consideration if they never received the agency's notice and therefore missed their window for appealing a denial of benefits. Boulton said he flagged that inequity for the floor manager, but Republicans did not correct the problem.
A new mission statement for unemployment programs
Finally, both bills revise a provision in state law that spells out the goal of unemployment programs. The current statute reads as follows:
As a guide to the interpretation and application of this chapter, the public policy of this state is declared to be as follows: Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this state. Involuntary unemployment is therefore a subject of general interest and concern which requires appropriate action by the legislature to prevent its spread and to lighten its burden which now so often falls with crushing force upon the unemployed worker and the worker’s family. The achievement of social security requires protection against this greatest hazard of our economic life. This can be provided by encouraging employers to provide more stable employment and by the systematic accumulation of funds during periods of employment to provide benefits for periods of unemployment, thus maintaining purchasing power and limiting the serious social consequences of poor relief assistance. The legislature, therefore, declares that in its considered judgment the public good and the general welfare of the citizens of this state require the enactment of this measure, under the police powers of the state, for the compulsory setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own.
The revised language takes out language calling on the legislature to take action to lighten the burden on jobless Iowans and their families. It also removes language stating that the policy should help jobless Iowans maintain their purchasing power. Here is the revised policy statement. I've put lines through the deleted passages and put the language Republicans added in bold.
As a guide to the interpretation and application of this chapter, the public policy of this state is declared to be as follows: Economic insecurity due to unemployment
is a serious menace tonegatively impacts the health, morals, and welfare of the people of this state. Involuntary unemployment is therefore a subject of general interest and concern which requires appropriate action by the legislature to prevent its spread and to lighten its burden which now so often falls with crushing force upon the unemployed worker and the worker’s family. The achievement of social security requires protection against this greatest hazard of our economic life. This can be providedThese undesirable consequences can be reduced by encouraging employers to provide more stable employment and by the systematic accumulation of funds during periods of employment to provide benefits for periods of unemployment, thus maintaining purchasing power and limiting the serious social consequences of poor relief assistance. The legislature, therefore, declares that in its considered judgment the public good and the general welfare of the citizens of this state require the enactment of this measure, under the police powers of the state, for the compulsory setting aside of unemployment reserves to be used for the benefit of personsThis chapter provides for the payment of benefits to workers unemployed through no fault of their own. The policy herein is intended to encourage stabilization in employment, to provide for integrated employment and training services in support of state economic development programs, and to provide meaningful job training and employment opportunities for the unemployed, underemployed, economically disadvantaged, dislocated workers, and others with substantial barriers to employment. To further this public policy, the state, through its department of workforce development, will maintain close coordination among all federal, state, and local agencies whose missions affect the employment or employability of the unemployed and underemployed.
Boulton and Democratic State Representative Bruce Hunter highlighted those changes in their remarks. Boulton called this part of the bill "some brutal honesty," because the state is no longer even pretending to soften the blow that lands "with crushing force" on jobless Iowans.
ONE STICKING POINT REMAINS
Unlike last year, when unemployment benefit cuts stalled in the House, Republicans now have the votes to get this done. House File 2355 cleared the House by 58 votes to 37, and the Senate by 30 votes to 20. But there was one important difference between the versions each chamber approved.
When presenting his new amendment on March 23, Bousselot said 43 states impose a one-week waiting period on those claiming unemployment benefits. But he said House Republicans listened to stakeholders, including those in the skilled trades, who explained the importance of being able to collect benefits for the first week.
In theory, the delay does not reduce the total amount Iowans can collect. But since most claimants go back to work before exhausting their eligibility, the effect would be to deny most Iowans any benefits for their first week of unemployment. According to Boulton, this provision is expected to cost jobless Iowans about $23 million each year.
Senate Republicans felt strongly enough about this point to put the waiting period back in the bill, rather than declaring victory and sending the House version to Reynolds this week.
Of the four Republicans who joined Democrats to oppose the bill, only Nunn explained his vote in public remarks. Speaking shortly before the Senate voted on final passage, he praised many elements of the bill, and said he would support the House version. The Senate amendment reimposing the one-week waiting period was a bridge too far for Nunn, who is a candidate for Congress in the third district. In his view, denying benefits "that first week is not a delay of pay, in my perspective, but it is a forfeiture of pay. It is a loss of the ability to take care of your family […] That, in my mind, is a penalty."
This bill will almost certainly reach Reynolds' desk in some form. It may become part of late-session horsetrading between House and Senate GOP leaders. It's not clear whether there are 51 votes in the House to pass the legislation with a one-week waiting period, or what Senate leaders might demand in exchange for approving the House version.
DEMOCRATIC ALTERNATIVES REJECTED
During the House and Senate debates, many Democrats pointed out that unemployment benefits are earned. Cutting them will not address the root causes of Iowa's workforce shortage, and could even worsen the problem. Democratic State Senator Herman Quirmbach noted that the vast majority of Iowans out of the workforce are not even receiving unemployment benefits.
State Senator Bill Dotzler and State Representatives Liz Bennett and Bob Kressig spoke about their own experiences of being laid off, and how stressful that was for them and those who depended on them.
Republican State Senator Jason Schultz cited statistics on alleged unemployment fraud. But Boulton noted that this bill does nothing to address such fraud, and Dotzler said national statistics on fraud don't reflect what's happening in Iowa. Along the same lines, House Minority Leader Jennifer Konfrst asked why Iowa would punish all unemployed people because a few are working the system.
State Representative Dave Jacoby highlighted the fact that the bill does nothing to address wage theft.
House Democrats offered several amendments that would make it easier for Iowans to get back into the workforce:
- prohibiting employers from requiring applicants to disclose prior salaries
- raising the minimum wage to $15 per hour
- "ban the box" language so applicants for most positions would not be required to disclose a criminal history
- restoring collecting bargaining rights for public employees
- creating a tax credit program for affordable housing
- establishing several policies that would make child care more affordable
All were ruled not germane and not voted on.
Senate Republicans voted down all of the Democratic amendments. One would have exempted seasonal workers from job search requirements if they will be returning to their jobs or another position in the industry. One would have eliminated the one-week waiting period to start collecting benefits. The last would have exempted some workers from the requirement to accept lower-paying jobs when their employment was interrupted by seasonal layoffs or unforeseen circumstances such as cyber-attacks.
One wonders what solutions Republicans will dream up during next year's legislative session to address the continuing workforce shortage.
Final note: This bill is a prime example of why I pay less attention to the legislature's "funnel" deadlines than I used to, and I no longer publish detailed posts on what's "dead" or "alive" after the first or second funnel. Any "dead" bill that is important to leadership can be passed at any time, by amending an unrelated bill that met the legislative deadline, as happened in the Iowa House in this case. Several Democrats expressed anger or disappointment during the March 23 debate, because what had been a non-controversial bill, which involved a lot of bipartisan work, was hijacked by Bousselot's amendment containing the unemployment benefit cuts.