Time for a $100/week unemployment increase?

On Tuesday the New Hampshire Senate voted down a proposal to increase unemployment benefits by $100 per week.  The increase had no end date, unlike coronavirus-related benefits. 

Current unemployment benefits 

The New Hampshire legislature last increased unemployment benefits in 2007.  Under current state law, the minimum benefit is $32 per week.  The maximum is $427. 

Gov. Sununu temporarily increased the weekly unemployment benefit as part of his coronavirus emergency orders, but that increase will most likely end this summer. 

The federal government added an additional $600 per week in unemployment benefits during the coronavirus emergency.  That federal benefit will also end this summer. 

The Senate proposal 

The New Hampshire Senate voted down an amendment to HB 1166 that would have increased the weekly unemployment by $100 across the board.  That means the new minimum would have been $132 and the new maximum would have been $527.   

The Senate passed a different version of HB 1166 that makes other unemployment changes.  For example, the amended bill allows benefits during coronavirus-related absences even after the governor ends the state emergency. 

HB 1166 now heads to the state House of Representatives. 

Time for an unemployment increase? 

Supporters of a $100 per week increase argue that workers need a cushion to survive the current economic crisis.  While Gov. Sununu has a plan to reopen every sector of the economy by July, some businesses have permanently closed. Unemployment is still over 10%. 

There is also an argument that unemployment benefits should at least keep pace with inflation.  $427 in July 2007 is equal to $526 in 2020 dollars, according to the Bureau of Labor Statistics. 

An increase the state can’t afford? 

Opponents believe that the $100 weekly increase will drain the state’s unemployment fund.   

Every time the unemployment trust fund falls below a certain threshold, the unemployment tax rate for employers also increases.  There will likely be a 2% increase in the unemployment tax rate by the end of 2020, even without a benefits increase.  Businesses arguably can’t afford any more tax increases after the coronavirus shutdown. 

While the $100 increase failed to pass this year, legislators will have an opportunity to revisit the issue next year.  Lawmakers can start requesting 2021 bills this September.