(The Center Square) – Gov. John Bel Edwards reached an agreement with legislators Thursday whereby the state will give up enhanced federal unemployment benefits early in exchange for a $28 permanent increase of the state’s maximum weekly payout for unemployed workers.
The federal government has been adding an extra $300 per week to unemployment benefits to help workers and stimulate the economy. Many employers believe the benefits are enabling large numbers of potential employees to stay out of the workforce, creating a labor shortage. Many economists disagree that the benefits are a major factor. At least 25 states already have announced plans to opt out before the scheduled end of the enhancement Sept. 6.
Meanwhile, advocates for workers have been urging state officials to increase regular unemployment benefits for the first time in more than a decade. The state’s current maximum of $247 per week is among the lowest in the nation.
As amended on the legislative session’s final day, House Bill 183 calls for a $28 increase in weekly benefits starting Jan. 1. However, the change would not become effective unless the state opts out of the $300 federal enhancement by July 31.
Rep. Larry Frieman, an Abita Springs Republican who opposed previous efforts to increase benefits during the session, spoke out in favor of HB 183. Rep. Mandie Landry, a New Orleans Democrat, questioned the wisdom of giving up the federal dollars and said claims that it was keeping people out of the workforce are based on “junk science and no data.”
Edwards has commissioned former Revenue Estimating Conference economist Jim Richardson to weigh the pros and cons of opting out, but the study isn’t ready yet. Edwards has said the positive impact of the federal money on the state’s economy and the fact that the state’s tourism sector was not close to making a comeback must be considered.
Edwards also has said, however, opting out in August when schools reopen might make sense, since that would relieve many struggling families of child care expenses. He said Thursday labor advocates were urging him to push for a permanent benefits boost.
“The 31st of July is not a bad compromise,” Edwards said Thursday.