Bid to curtail unemployment benefits meets New Hampshire Senate skepticism

A NH House bill to cut the duration of unemployment benefits by nearly 40 percent, with the goal of encouraging people to return to work sooner, appears to be going nowhere in the Senate after Wednesday’s public hearing. House Bill 1337 would chop 10 weeks off the current 26 weeks of unemployment benefits when the state’s jobless rate goes below 3 percent, as it is now. The bill would add a week with each half-percent uptick until it returns to 26 weeks when it reaches 8 percent.

“It would index unemployment compensation duration to the unemployment rate,” testified Rep. Leonard Turcotte, R-Barrington, sponsor of the bill, which he called a “rational and commonsense tool that will strengthen the state’s trust fund and will reduce the unemployment taxes that businesses pay, allowing for better pay for their employees or the expansion of their businesses. “

He presented the bill as a bit of a compromise, since his original proposal would cut the duration of benefits even further. He also noted that there was a provision for the governor to extend benefits during a state of emergency.

Noting that 10 other states have already done this, he added that it would “incentivize the work ethic,” concluding that in a time of labor shortages “we need more workers not extended welfare and unemployment enrollment” and added that it would also reduce unemployment taxes for the employer.

But people are already getting back to work, and at a faster rate than nearly every state in the nation, argued Deputy Employment Security Commissioner Richard Lavers, who called the bill “unnecessary and unwise.”

Armed with charts and statistics, Lavers testified that New Hampshire’s private sector workforce levels were at 99 percent of pre-pandemic levels. There are still 5,600 jobs to fill, but the state is on track to reaching pre-pandemic workforce levels in the second half of this year, if not sooner, he said.

Unemployment claims are another indicator.

For the week ending March 26, according to federal statistics, 2,186 Granite Staters were collecting unemployment. In Maine, there are about 7,000 filing and in Vermont, there were 3,500. As a result, the state has the second lowest unemployment tax burden in the nation, only a tenth of percent of wages, said Lavers.

He also said that not many people take the full 26 weeks of unemployment compensation. Half return to work after 10 weeks, and the average duration is 13 weeks. Only 17 percent actually exhaust their benefits, and many of those had part-time employment, mostly working in hospitality and retail.

There has been a drop-off of participation in the workforce, Lavers said, but “this is not caused by the unemployment program.” It’s mainly appears to be among people who over 60, and that is because of fear of Covid as well the strength of their investments and home values. Also showing a lower labor force participation are younger workers, mainly men, between the age of 20 and 29 who have been able to get by with a lot of federal aid and “federal forgiveness of obligations,” which are coming to an end.

But Lavers pointed out that New Hampshire was also one of the earliest states to respond, providing generous benefits before the federal government did so and that was because “we had the confidence of a solvent trust fund and unemployment fund was not undersized.” That is why he was concerned that the bill would “undersize the program by 40 percent, making the state depend on the federal government taking action at the beginning of the next downturn.”

On reason that New Hampshire workers might be going back to work faster is that the amount of weekly benefits is lower than most of the rest of the nation. In New Hampshire, unemployed individuals get 60 percent of wages, as opposed to two-thirds in most other states, and the maximum benefits of $427 a week is also among the lowest, pointed out Raymond Burke, an attorney for NH Legal Assistance. On average the weekly benefit, is about $293 a week of taxable income, hardly enough to live on, he said, adding, “This provides an incentive to return to the labor market.”

In addition, Burke noted that the law requires workers to show they are actively seeking work, and if they turn down a job offer they can lose their benefits.
But was Lavers’ testimony enough to convince the Senate Executive Departments and Administration Committee to unanimously recommend killing a bill backed by the House Republican leadership that passed there, 179-153?

“The department makes a compelling case,” said Sen. Suzanne Prentiss, D-West Lebanon.

“I agree,” said Sen. Sharon Carson, R-Londonderry, chair of the committee. “I can understand why he filed the bill, thinking if we lessen the time of unemployment we will have more people going back to work. But as you can see, there is not a lot of correlation.”