Bill would cut Iowa unemployment benefits for workers starting in 2022

A proposal in the Iowa House would reduce unemployment benefits starting in 2022. (Photo by Spencer Platt/Getty Images)

A business-backed proposal to cut unemployment benefits for workers and reduce dependent benefits for people with large families drew criticism Tuesday for adding stress to already-stretched Iowans.

House Study Bill 203 would impose a one-week waiting period before new unemployment benefits would start after someone loses a job. It also would cut off extra benefits for dependents of people with more than two children; eliminate an extra 13 weeks of benefits tied to plant closings; and cut off benefits for people who do not accept a job offer while collecting unemployment.

Rep. Dave Deyoe, R-Nevada, said Iowa would be conforming with surrounding Midwest states in having a waiting period for unemployment benefits. He said the measure also would keep the state’s unemployment trust fund solvent.

As unemployment has dropped below 4 percent, he said, “I see a lot of ‘Help Wanted’ signs out again,” he said. “… I still hear stories, again, about some employers that are having a hard time finding employees.”

Similar legislation has been proposed in past years by Iowa Workforce Development, but this year the agency has not asked for it. Instead, the Iowa Association of Business and Industry (ABI), National Federation of Independent Business, and chambers of commerce have supported the legislation.

Democrats and labor leaders questioned the need for the legislation, pointing out that the state’s unemployment trust fund is solvent and no changes are anticipated that would affect employers’ tax rates this year or next year.

Labor leaders said Tuesday that the waiting period will have a significant effect on building trades and manufacturing workers who have jobs but are often put on short-term layoffs for plant cleaning, retooling, slowdowns in product demand and similar issues.

Kelli Harrison, a United Auto Workers member from Marshalltown, said some employers are “notorious” for layoffs.  Some plants build to order, she said, so they fulfill their orders and then lay off the workers.

She asked: “Do we really want to go after these workers? Do you want to take a week’s worth of pay because they were laid off because of no fault of their own, during a time when unemployment funds are not depleted? Do we really have to do this at this time during a pandemic?”

Charlie Wishman,  president of the Iowa Federation of Labor, said the plant-shutdown measure would disproportionately affect rural communities.  “… Those extra 13 weeks, you know, they help sustain a Main Street” when a small town’s major employer closes its doors.

Deyoe and Republicans on the committee supported an amendment to push back the enactment date, originally July 1 of this year, to July 1, 2022. They cited the ongoing pandemic but also the need to give Iowa Workforce Development more time to implement the changes.

Democrats supported the change but argued that the effects of the COVID-19 pandemic might still be affecting the state. “I, too, hope that next year, we are not in this unstable time for our workforce and for our economy. But we have no certainty that we are going to be out of this,” Rep. Kirsten Running-Marquardt, D-Cedar Rapids, said.

The House Labor Committee debated for about five-and-a-half hours before approving House Study Bill 203  on a party-line 10-6 vote, shortly after 12:30 a.m. Tuesday.

Democrats proposed 14 amendments during the sometimes emotional debate, all of which failed on party-line votes. Many of the amendments sought to exempt certain groups of essential workers from the benefit cuts, such as those working in law enforcement, health care, child care and education.

“Chairman Deyoe, ABI and your fellow Republicans, have the unmitigated audacity tell these essential workers that if they should lose their jobs through no fault of their own, that they will lose probably the most important week of their unemployment benefits, the first week,” Rep. Bruce Hunter, D-Des Moines, said.

He and other Democrats said they would draft “hundreds” of similar amendments to exempt essential workers and propose pro-worker policies if Republicans debate the bill on the House floor.