Just after closures result in hundreds of layoffs, Senate Finance moves bills to scale back safety net

Over the past couple of weeks, about 1,500 West Virginians have learned they’ll lose their jobs because big companies are shutting down their workplaces.

Cleveland-Cliffs announced its tinplate production plant in Weirton will idle in April, resulting in potential job losses for 900 workers. Then, Allegheny Wood Products closed its doors and eliminated about 600 jobs at multiple locations.

Despite all those job losses, the Senate Finance Committee on Saturday took up two bills that would significantly restrict unemployment benefits in West Virginia.

The bills now go to the full Senate. Members of the committee noted that very similar bills have come up in past years but have not become law.

Josh Sword

Organized labor leaders said they will urge their members to reach out to senators and delegates and tell them to reject any attempt to take away unemployment benefits.

“This is quite possibly the most heartless act I’ve seen in my 25 years of representing working people at the Capitol,” said Josh Sword, president of West Virginia AFL-CIO.

“To take earned benefits away from nearly 2,000 hard-working people who are losing their jobs through no fault of their own is unimaginably cruel and completely unnecessary.”

The changes, if instituted, would kick in July 1 — likely affecting people coping with unemployment after that date.

Workforce West Virginia’s director testified before the committee that the overriding reason for the changes would be shoring up the state’s unemployment trust fund. Right now, the trust fund has a balance of $387,657,779.05.

State officials cited economic models showing that a prolonged unemployment rate of 10% could bankrupt the trust fund in 91 weeks. In other words, the state’s unemployment trust fund could go just short of two years during a recession considered severe before being exhausted.

Scott Adkins

“We’re trying to be proactive because we’re going in the wrong direction on that trust fund balance,” Scott Adkins, acting director of Workforce West Virginia, told senators.

“Severe recession — 18 months, and we’ll be looking to this body for funding or we’ll be looking to the feds.”

Senate Bill 840 makes a range of changes, most significantly using West Virginia’s seasonally-adjusted unemployment rate to determine the maximum number of weeks of benefit eligibility. So, for example, if the average unemployment rate is below 5.5 percent, the maximum duration of benefits would be 12 weeks.

The most recently released figures showed West Virginia’s unemployment rate at 4.3 percent. The current maximum duration for unemployment benefits is 26 weeks.

That bill specifies that West Virginians would only remain eligible for unemployment benefits if they conduct at least four work search activities each week. There are 10 activities that would qualify, like completing job applications or taking a civil service exam.

The bill lowers the maximum weekly benefit rate from its current 66 and two thirds of the average weekly wage in West Virginia down to 55 percent. The amount is not to exceed $550, according to the bill.

Senate Bill 841 focuses on  unemployment taxes and benefits. It’s a companion bill that reflects some of the changes proposed by SB 840.

Jack Woodrum

Lawmakers on the Senate Finance Committee brought up the situations at Cleveland-Cliffs and Allegheny Wood Products, wondering how they might affect the state.

“Recently we’ve had two major employers in the state that have closed their doors. How’s that gonna impact the fund?” asked Senator Jack Woodrum, R-Summers.

Adkins said the closures will have significant effects, even as the state works to help laid off employees find other jobs as quickly as possible. “It could have a major impact on the trust fund, sure,” he said.

Mike Oliverio

Senator Mike Oliverio, R-Monongalia, also asked about the effects of closures like the one at Alleghany Wood Products.

“I’m just anxious about this trigger that could limit employment benefits when we have people who are pretty good wage earners. Oftentimes we think about unemployment comp for folks in lower wage classifications, but these are folks with pretty good wages and as they attempt to replace that on a temporary basis I’m a little bit anxious about us stepping in with a cap right now.”

Oliverio wanted to know if there are alternatives.

Adkins said that’s up to the Legislature.

“I mean, I don’t want to convey that the trust fund’s in dire straits. It’s not. It’s in pretty good shape,” he said. “But a major recession coming down the pike could have a pretty significant impact on the trust fund.”

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