Lawmaker wants to cut eligibility for jobless benefits in Arizona

The financial beneficiaries of this cut to workers would be employers, who could end up paying less in unemployment premiums.

Legislation approved this week by the Republican-led House Commerce Committee on a party-line vote would slash the number of weeks of eligibility. In some cases, the change would be dramatic.

Under current law, workers laid off or fired without specific causes can collect to to 24 weeks of benefits, or 26 weeks if the state jobless rate exceeds 5%.

The payments are designed to provide a cushion while someone seeks a new job.

House Majority Leader Michael Carbone, a Buckeye Republican, wants those benefits cut off as quickly as 12 weeks anytime the state jobless rate is 5% or less.

Arizona’s latest unemployment rate is 3.8%.

Carbone’s House Bill 2450, which now needs approval by the full Republican-controlled House, would implement a scale allowing for longer benefits as the jobless rate goes up.

It would take an unemployment rate exceeding 8% for someone to get up to 26 weeks of benefits.

That rate, while unusual, is not a far-fetched scenario.

Arizona’s jobless rate hit nearly 11% during the height of the recession between 2008 and 2010, meaning that one out of every nine people looking for work — the way the unemployment rate is legally defined — could not find a job. And it spiked briefly at 13.8% during COVID.

But Carbone said there’s really no need for benefits to last as long as they do.

As of November, the U.S. Bureau of Labor Statistics reported about 190,000 jobs open.

“When economic conditions are good and there are jobs in Arizona to be had, we have an interest in protecting the finite resources of the (unemployment insurance trust) fund so we can avoid becoming insolvent,’’ Carbone said. “If you lose your job, and it’s a good market, you’re probably going to find a job.’’

The Arizona Department of Economic Security, however, says even in the current job market, the average time someone collects unemployment benefits is 14 weeks.

The proposed legislation is being promoted by the Opportunity Solutions Project, part of the Foundation for Government Accountability, which has pushed for what it calls free enterprise policies. It has argued repeatedly here and in other states to cut the length of benefits.

But Brenda Furnich, lobbyist for the William E. Morris Center for Justice, said it’s not as simple as Carbone makes it seem for workers, laid off for no fault of their own, to simply jump back into the workforce. She said they may need time to find a job that matches their experience or abilities.

She also reminded lawmakers that this isn’t a handout like food stamps, cash assistance and Medicaid but instead “earned benefits’’ employers are required to provide and available only to those who have worked a certain number of hours in the prior year.

Rep. Walt Blackman said the claim of jobs being plentiful isn’t true throughout the state.

Unemployment rates vary throughout Arizona.

Greenlee County, heavily dependent on mining and the jobs that support it, registered a 2.4% jobless rate for December, the most recent data available. At the other extreme is Yuma County, where the unemployment rate hit 11.9%

Blackman, a Snowflake Republican, made it clear to colleagues on the Commerce Committee he doesn’t need statistics to know that, in some areas, it takes more time to find new employment.

“I see it every day in my communities,’’ he said. “I talk to people in Walmart, I go to church with them, that are struggling to find jobs. And it does take them a while.’’

And while Blackman voted for the bill in committee, he said his final decision will be based on what he hears from constituents and community leaders.

Arizona law allows workers who are laid off or fired for no fault to collect up to one-half of what they were earning while they look for new work. It is capped at $320 a week, regardless of their prior earnings.

Figures from Equifax show only five states have lower maximum benefits. Nothing in Carbone’s bill would change that.

Of note is that jobless benefits are not paid by the state or its taxpayers. Instead, all employers are assessed a fee based on how often there are claims filed against them.

Put simply, companies that hang on to their workers pay the lowest premium — 0.04% of the first $8,000 of each worker’s salary. That translates out to as little as $3.20 a year.

By contrast, companies with the highest rates of layoffs and turnovers pay more. The top rate, according to the Department of Economic Security, is 9.72% of the first $8,000, or $778 a year.

New employers pay 2% for the first two years until they have a history.

Even if Carbone is successful in cutting the length of benefits, and everybody got kicked off the rolls, that wouldn’t match the number of 190,000 open jobs. The latest figures from DES show there are fewer than 22,000 getting payments.

Carbone said after the hearing he will look at the issue raised by Blackman about whether using a statewide unemployment rate to determine the length of benefits throughout Arizona is fair.