DES MOINES — An Iowa Workforce Development plan to delay paying unemployment benefits — which was endorsed by an Iowa House Labor Subcommittee — drew fire from union advocates, especially those representing construction trades workers.
The measure, House Study Bill 42, would delay paying the first week of benefits until an employee had used up all 26 weeks a year of unemployment benefits. The out-of-work employee still would get payments, but only starting with what now is the second payment. The first week of payments would come only at the end.
For most, though, that would mean not at all. Only 25 percent of unemployment insurance claimants exhaust their full 26 weeks of benefits, according to Workforce Development. The changes would cause a hardship for unemployed workers who live paycheck to paycheck, said Felicia Hilton of the North Central States Regional Council of Carpenters.
Many construction workers typically are unemployed for four or five weeks a year — far short of the 26 weeks of unemployment necessary to collect that first week’s worth of benefits. Over their careers, the loss of benefits would amount to thousands of dollars, she told the subcommittee.
Even if they are out of work for 26 weeks in a year, “when they get their money matters,” Hilton said.
Typically there already is a two- to three-week time window before an unemployed worker receives benefits. So delaying another week before any benefits arrive would mean those workers run up credit card debt, try to take out short-term loans or fall behind on bills.
Iowa is one of eight states that doesn’t require a waiting period for unemployed workers to qualify for benefits, according to Workforce Development.
Nick Olivencia, legal counsel for Workforce Development, explained to the subcommittee the responsibility the state agency has for managing the $1.15 billion unemployment trust fund.
Last year, it paid more than $360 million in unemployment benefits. About half went to workers off the job for four weeks or less.
The first week of benefits “is the most important in terms of family stability,” said Rep. Kirsten Running-Marquardt of Cedar Rapids, one of two Democrats on the labor subcommittee.
She called the proposal “baloney” and said reducing unemployment benefits makes Iowa less attractive to workers — which the state is attempting to recruit and retain to fill jobs.
“We are in a race against the rest of the country for workers,” she said. Iowa’s 2.4 percent unemployment rate is among the lowest in the nation. “If we’re trying to attract workers, why would we take 10 steps backward? We shouldn’t penalize Iowans.”
The bill’s supporters, Republicans on the subcommittee and the Iowa Association of Business and Industry, “don’t see the human side because they are in a theory bubble,” Hilton said.
Republican Reps. Gary Worthan of Storm Lake, Dave Deyoe of Nevada and Phil Thompson of Jefferson signed the bill. Democratic Reps. Running-Marquardt and Jeff Kurtz of Fort Madison did not sign it.
The bill next heads to the full committee.