Fate of the Federal Lifeline for Long-term Job-seekers Still Uncertain
Ten U.S. Senators announced today that they have reached a deal for restoring federal unemployment benefits for about 2 million people who have lost those benefits since the end of 2013. The compromise would extend the expired program through the end of May, and would make the restored benefits retroactive to the beginning of the year. That would be very welcome new for many jobless workers and their families who are struggling with one of the harshest winters in decades.
The deal appears to have at least 60 votes, which would make it immune from the filibusters that have stymied other efforts in the Senate to restore the federal lifeline for the long-term unemployed. Although the prospects for passage in the Senate now look very good, its chances in the House are unclear. Some House conservatives quickly condemned the bill today. Read more
Unemployment of Six Months or More Climbs by 203,000 in February
The new employment numbers released Friday provide further evidence of the need to restore the federal Emergency Unemployment Compensation (EUC) program for the long-term unemployed. Although there was a little bit of positive news relating to total employment levels, the new data illustrate that the modest job growth has not eased the crisis facing the long-term unemployed. For example:
- the total number of jobless workers who have been unemployed for at least six months grew significantly in February, climbing by 203,000 to 3.8 million people;
- the unemployment rate ticked up to 6.7%; and
- the labor force participation rate is one-half a percentage point below where it was one year ago.
Federal unemployment benefits for people who have been unemployed more than six months were cut off at the end of December. One argument made by the supporters of that decision is that eliminating the EUC program would reduce the jobless rate by giving the unemployed increased incentive to find work. Read more
The FY 2015 budget proposal unveiled by the President this week addresses an issue that many politicians, researchers and commentators across the political spectrum have recently been talking about – providing assistance to low-income working adults who don’t have dependent children. We were very pleased to see the part of his budget that would help that long-overlooked population by making more “childless” workers eligible for the federal Earned Income Tax Credit (EITC) and increasing the small credit for those who are already eligible.
The EITC encourages and rewards work, offsets federal payroll and income taxes, and boosts living standards. As the Center on Budget and Policy Priorities (CBPP) points out: “Next to Social Security, the EITC combined with the refundable portion of the CTC [child tax credit] constitutes the nation’s most powerful anti-poverty program.” However, the federal EITC currently provides little or no benefit for adults who don’t have dependent children, and the Wisconsin EITC doesn’t apply to that population. Read more
Congress has failed to extend federal emergency jobless benefits, harming tens of thousands of jobless workers in Wisconsin and the businesses that depend on them as customers. Since federal benefits were abruptly cut off at the end of 2013, 35,000 jobless workers in Wisconsin have been cut off or denied access to federal unemployment benefits so far.
Tiny Piece of Projected Surplus Could Mitigate Recent Tax Increases on Families and Seniors with Low Incomes
Many of Wisconsin’s most vulnerable families and elderly adults would not get much help from the Governor’s plan for the projected state surplus. That could change if the Legislature were to use a small fraction of the surplus to undo recent cuts to the Homestead Credit and Earned Income Tax Credit.
Raising the minimum wage, a move that has extensive support among Wisconsin residents, would have widespread benefits in the state and would give a raise to one out of five Wisconsin workers.
Despite Using Far More TANF Funds for the WI EITC, Total Spending Declines
Today is EITC Awareness Day, when the IRS works with community organizations, elected officials, state and local governments, schools, employers, and other interested parties to spotlight the Earned Income Tax Credit, and to encourage more eligible families and individuals to apply for the credit. The IRS estimates that one fifth of eligible taxpayers fail to claim and get this important credit.
In recognition or EITC Awareness day, let’s take a look at the Wisconsin EITC, including some recently released data showing the declining value of that credit over the past years, and the role of that decline in adding to the state surplus. It’s also a good time to consider the effectiveness of the EITC as a tool for helping make work pay for low-income families.
Congress has failed to extend federal emergency jobless benefits, harming jobless workers, businesses, and local economies in Wisconsin. The abrupt end of these benefits also harms many Wisconsin children with parents who have been out of work a long time.
Extended benefits under the federal Emergency Unemployment Compensation program ended abruptly at the end of December, reducing the maximum number of weeks of unemployment benefits in Wisconsin from 54 weeks to 26 weeks. Discussions about extending benefits are underway in the Senate, although it is unclear whether lawmakers can agree on whether the cost of re-authorizing extended benefits needs to be offset by cuts in other programs. Senate Republicans have also indicated they are interested in tying an extension of emergency benefits to priorities such as building the Keystone XL oil pipeline and opening energy exploration on federal land.
Children of parents who have been out of work a long time are among the people hurt by the inability of Congress to come to an agreement. Read more
A total of 13 states welcomed in the New Year Wednesday with minimum wage increases – thanks in many cases to formulas that automatically adjust it for inflation. Washington State leads the way, with the nation’s highest state minimum, which is now $9.32 an hour (compared to the federal minimum of $7.25). A 14th state, California, will also increase the minimum wage this year – to $9 per hour, but not until July.
According to an analysis by the National Employment Law Project (NELP), the minimum wage increases that took effect today directly benefit over 1.4 million people — 1,441,000 to be exact. An additional 1.1 million are expected to benefit as employer pay scales are adjusted upward to reflect the new minimum wages. A number of additional workers will benefit from local increases.
Black Wisconsinites fare far worse than white ones in a wide range of areas, including economic wellbeing, educational achievement, and incarceration, according to a new report from the Center on Wisconsin Strategy.
The size of the disparities in Wisconsin are alarming on their own. Those disparities are even more alarming when compared to the much smaller gaps between blacks and whites that occur in other states. In nearly all the indicators included in the report, Wisconsin ranked in the top 5 states with the largest racial disparities. Wisconsin had the largest disparities in the country in three indicators, including two in the area of education: 8th grade math scores and dropout rate. Even at a young age, Wisconsin residents are subject to wide opportunity gaps.
The extreme racial disparities in Wisconsin — which the report authors called “brutal” — are relatively new to Wisconsin, and far from a historic inevitability. Read more