Warm Southern Breeze

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Tennessee’s Republican Legislators Seek To Cut Unemployment Benefits Time

Posted by Warm Southern Breeze on Friday, April 9, 2021

Tennessee’s Republican State Legislators Have Lost Their Minds

Republican-written legislation being considered in the Tennessee General Assembly would kick to the curb over 65,000 unemployed Tennesseans who have lost their jobs due to the COVID pandemic.

Republicans are seeking to cut in half the time frame for collecting unemployment benefits.

Richie Townsend, 39, an East Nashville resident and former bartender at Rolf and Daughters in Germantown, has struggled to find work after losing his restaurant job when the COVID-19 pandemic struck in March 2020.

In the time since, he’s held various unstable, low-paying jobs from which he, and others, have been fired over three times, due to no fault of his own. During those times, he has applied for, and has been granted access to his State Unemployment Compensation, a type of insurance paid for by employers, and backed by the state government, which all 50 states have.

Fortunately, he has benefits remaining, but only because of the extensions granted by Congress.

He’s recently started a new job in Franklin, but even as the state told him it is expediting his request for benefits, he’s reached out to his state House member but hasn’t gotten any payments on his latest extension.

“It sounds like an over-exaggeration by our local government to try to react to the fact that unemployment was extended for a year and a half in total,” he said.

Though he hates to admit it, Townsend says he’s become “jaded” by the unemployment system but notes he has definitely educated himself by doing research. “It made me want to reach out to local legislators … because I feel like people need to know what’s going on. I feel like there’s a lot of information out there the general public isn’t aware of, how help is being offered as a mask, but how when you get down to the nitty-gritty it’s really not that great.”

In an email, he wrote that, “I find it absolutely absurd that Tennessee, which already has one of the lowest unemployment payouts in the country, would attempt to remove 14 weeks of unemployment from those that need assistance.”

TN State Senator Jeff Yarbro of Nashville, D-21, part of Davidson County

State Senator Jeff Yarbro, a Nashville Democrat and leader of the Democratic Caucus, said that reducing benefits after one of the worst economic years in state history is nonsensical. “We’ve seen hundreds of thousands of Tennesseans be pushed out of work through no fault of their own, sometimes for a really extended time period. Making Tennesseans’ unemployment relief even less generous is a step in the wrong direction.”

Tennessee Democratic State Senator Yarbro agrees that increasing unemployment payments is a good idea, because the state has one of the “stingiest” programs in the nation, with payments well below surrounding states such as Kentucky, Georgia and Missouri, and said that most recipients get less than the maximum payment of $275 a week.

Senator Jeff Yarbro said Republicans are busy distracting people with their “culture wars” legislation discriminating against a minority of the population – transgender youth – while jamming down the The People’s throat a bill that would “make Tennessee’s unemployment the least generous in the entire country in the wake of a pandemic where hundreds of thousands of people suffered with unemployment.”

Senator Yarbro said, “You’ve gotta wonder why someone would go to all the trouble to obtain power to use it for such trivial and mean-spirited ends and spend so little time trying to solve an actual damn problem.”

TN State Senator Art Swann of Maryville, R-2, Blount and Sevier Counties

Senate Bill 1402 sponsored by Tennessee Republican State Senator Art Swann from Maryville, and House Bill 1039 sponsored by Tennessee Republican Representative Kevin Vaughan of Collierville, would cut in half – from 26, to 12 weeks – the time a recipient is eligible to receive UC benefits, while giving only a modest increase of $20/month, or $5/week. If the bill passes and becomes law, it would take effect July 1, 2023. However, neither bill has been introduced in committees.

TN State Representative Kevin Vaughn of Collierville, R-95, part of Shelby County

The prospective legislation is complicated, and relies upon a special formula, the calculus of which is not cited, and under the terms laid out in the prospective legislation, the 12-week limit would kick in only if the state’s unemployment rate goes below 5.5%. And an additional week of benefit eligibility – 7 days – would be added for every 1/2% increase in the UC Rate, and would max out at 20 weeks, but only if the UC Rate went to 9%.

Unemployment figures are not calculated on a daily, or even weekly basis, but are calculated on monthly, and quarterly basis, meaning that recipients could be left twisting in the wind, when they need help the most.

Tennessee’s annual average unemployment rate seldom rose above 9%, according to a Tennessean

An analysis of Tennessee’s average annual unemployment rate based on data from the Bureau of Labor Statistics in the United States Department of Labor shows that the state’s average unemployment rate from 1967 through 2020 was 6.3%.

Tennessee State Unemployment Rate, historical overview from 1976-01-01 to 2021-02-01

If the Republicans’ bill becomes law, Tennesseans would see their benefits period cut to either 13, or 14 weeks.

Tennessee Republican State Senator Art Swann who represents Senate District 2, the district containing Alcoa, lives in Maryville, and said on Wednesday, April 7, 2021 that he is planning to amend the bill because he doesn’t think 12 weeks is enough time for a person to find gainful employment, but was uncertain how much time any prospective amendment would provide.

An analysis of the prospective Republican legislation done found that, as the bill HB1039 & SB1402 is written, it would gut the Tennessee State Unemployment Compensation Trust Fund of between $31 to $35 million, thus making it even less than the Federal recommendations suggest, which is where it has been languishing for many years.

Tennessee’s UC Trust Fund suffered tremendously from the COVID pandemic, when in 2020 the TN State Unemployment Rate increased to over 15%.

Author of the House Bill 1039, Tennessee Republican Representative Kevin Vaughan of Collierville said, “The Unemployment Trust Fund is called a trust fund because people trust it’ll be there when they need it. But in order for it to be there when they need it, we’ve got to have it sustainable. And had we not had the federal CARES Act money to float us during the pandemic, we would have seen how vulnerable we really are. This is just a math equation that stabilizes and makes the system more sustainable.”

Tennessee Republican Representative Kevin Vaughan of Collierville failed to explain how reducing the operating revenue for the TN State UC Trust Fund would help improve its stability, or solvency.

The state’s maximum UC benefit is $275/week, which is the 5th lowest in the United States. And calculated on a 40-hour weekly basis, is $6.88/hour, below the Federal Minimum Wage. States that have shorter time frames for UC eligbility have significantly greater benefit rates than Tennessee.

Tennessee Republican Representative Kevin Vaughan of Collierville claimed that Research done by the United States Department of Labor study found that Tennessee’s Unemployment Trust Fund ranked 31st nationally for sustainability, before the pandemic struck, but he did not provide evidence of his claim from the sources.

Tennessee Republican Governor Bill Lee’s administration placed nearly $1 billion from the CARES Act funding into the TN State UC Trust Fund in order to to keep it well above the $1 billion solvency mark, otherwise, the governor claimed that businesses would have had to pay higher rates into the trust fund, which would in effect be equating it a business tax increase.

However, Tennessee Republican Governor Bill Lee failed to state that Unemployment Compensation is a type of insurance which is paid for as part of the employee’s calculated overall compensation package, which is also deductible for the company’s income tax purposes, thus effectively being a type of tax deduction, rather than a “tax increase” as he wrongly stated.

For the week ending March 27, 2021, almost 111,200 Tennesseans received UC benefits, while 69,000 claims were pending an eligibility determination.

Most states allow 26 weeks UC eligibility, but the states of GA, NV, MO, HI, and KY all have 16 weeks, or less, but their maximum weekly benefit is much greater than TN’s $275. GA has $365, NV has $450, MO $320, HI $648 and KY $552.

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