When the Governor’s stay at home order went into place in March, it waived the usual requirement that unemployment insurance claimants show proof they are searching for a job while collecting benefits. As of early August, Governor Edwards’ has reinstated the requirement. That was the right move.
At the height of the pandemic, when tens of thousands of new unemployment claims were being filed across the state every week, businesses were closing or scaling back to essential staff only, and the Louisiana Workforce Commission was struggling just to process incoming claims, the work search requirement waiver made a lot of sense. Heading into the pandemic, Louisiana’s Unemployment Trust Fund was one of the strongest in the nation, with more than $1.2 billion available. Since then, with a payout burn rate of $50 million per week, the trust fund is down by about 80% and the state is implementing plans to borrow federal money to shore up the account. The Trust Fund is rapidly depleting, putting higher business taxes and lower benefit amounts into play come January.
As state unemployment payouts shot sharply up, they were supplemented by a $600 weekly federal pandemic UI supplement. Between state UI benefits and the federal supplement, the average Louisianan collecting UI benefits received 110% of their weekly wages, according to analysis by the US Chamber of Commerce. The President’s executive order providing Lost Wages Assistance went into effect in Louisiana in August, providing half as much in federal UI supplemental benefits.
That benefit has now ended and looking back over the last two months the data shows that as supplemental wages dropped and ended, weekly unemployment claims in the Capital Region have fallen 30%. UI benefits are critically necessary for people, families, and the businesses they patronize. But as important is ensuring that benefits aren’t a disincentive for returning to work.
It is important to the health of our economy that people out of work, through no fault of their own, demonstrate they are working towards reentering the workforce, and perhaps pursue new or increased career training along the way. Reinstating the work search requirement is a prudent step to take to urge reengagement in the economy and fill those jobs that are available. BRAC support the Governor’s commonsense action on this issue.
Liz Smith
As BRAC’s senior vice president of economic competitiveness, Liz leads the organization’s public policy advocacy, strategy, research, and reform activities aimed at advancing the quality of life and economic competitiveness of the Baton Rouge Region.