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.
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
Federal Lifeline for the Unemployed Ends Dec. 28th, but the Debate Will Continue
Federally funded unemployment insurance benefits, known as emergency unemployment compensation (EUC), will expire at the end of this week. However, the debate on this issue will continue into 2014, as Senate Democrats seek an opportunity to restore the EUC program. (See, for example, this article about Senator Reed’s proposal.)
Here are ten key things to know about the EUC program, which expires on December 28:
1) The maximum length of unemployment insurance benefits will immediately drop to the 26 weeks of state benefits, which is slightly less than half the current limit in Wisconsin of 54 weeks of combined state and federal benefits. (That has already been reduced from a maximum of 99 weeks during the worst of the recession.)
If Congress does not act, jobless workers in every Wisconsin county will miss out on federal support targeted at helping individuals who have been searching for a job for a long time, according to a new analysis from the Wisconsin Budget Project.
At the end of the year, federal unemployment benefits are slated to end. The result is that 99,000 unemployed Wisconsin residents will lose an estimated $361 million in assistance in 2014.
Today’s new Wisconsin Budget Project analysis shows the economic downside to ending federal unemployment benefits, with estimates that describe how jobless workers in each county would be affected. Here are some examples:
- In Milwaukee County alone, nearly 26,000 individuals who have been searching for a long time will miss out on $93.8 million worth of assistance for the long-term unemployed, unless Congress acts;
- In Marathon County, 2,800 individuals will miss out on $10.1 million in assistance; and
- In Fond du Lac County, 1,500 workers will lose out on $5.4 million in assistance.
Negotiators in Congress announced this afternoon that they have reached a tentative agreement on the parameters of a budget compromise that would make modest reductions in the sequester cuts for fiscal years 2014 and 2015. The reductions in some of the across-the-board cuts will be more than offset by other cuts, such as reduced funding for retirement benefits of new federal employees, as well as increases in some fees, such as airline ticket fees, thereby slowing growth in the federal deficit.
As others have noted, this definitely isn’t the sort of “grand bargain” that some lawmakers may have hoped for. In addition, it isn’t certain that the votes will be there to pass this modest compromise. Some conservative groups are urging Republicans to vote no, and some Democrats are very reluctant to vote for a compromise that doesn’t extend the expiring federal Emergency Unemployment Compensation benefits, which provide assistance for workers who have been unemployed at least six months. Read more
Thousands of out-of-work Wisconsinites who have been searching for a job for a long time will lose their unemployment benefits at the end of the year, unless Congress acts to renew federal unemployment benefits. According to a new analysis from the Wisconsin Budget Project, 65,500 jobless workers in Wisconsin will lose access to federal benefits over the next six months, as shown in the chart below.
Most states pay unemployment insurance benefits to jobless workers for a maximum of 26 weeks. In times of higher unemployment, Congress authorizes federally-funded benefits that provide assistance to people who reach the limit on their state-financed unemployment insurance. If the program that provides federal unemployment benefits is allowed to end, the maximum duration of unemployment benefits for jobless workers in Wisconsin will drop by more than half, from 54 weeks to 26 weeks.
Today’s job numbers show little improvement in long-term unemployment
Unemployment benefits kept nearly two million people out of poverty last year, but that number has declined dramatically in recent years as policymakers have curtailed benefits available for unemployed workers, according to a recent report from the Center on Budget and Policy Priorities. And it will fall much more dramatically in January if Congress does not renew the federal extended benefits for the long-term unemployed.
In 2012, unemployment benefits lifted 1.7 million people above the federal poverty line, down from 3.2 million people in 2010, as shown in the chart below. Part of that decline in the number of people kept out of poverty stems from the fact that fewer workers are unemployed and therefore receiving unemployment benefits, but a much larger portion of the decline stems from the fact that fewer workers that are unemployed are receiving benefits. According to the report, the number of UI (Unemployment Insurance) recipients for every 100 unemployed workers fell from 67 in 2010 to 48 in 2012. Read more
A Significant Economic Hit to the National Economy and a Gradually Expanding Erosion of Key Programs
Economists expect the federal government shutdown to have significant adverse consequences for the national economy. This LA Times article reports that some project that even just a two-week partial shutdown will cause a reduction of 0.3 to 0.4 of a percentage point from national economic growth in the fourth quarter. That’s particularly a problem when the economic recovery is already so sluggish that job growth has been barely keeping ahead of population growth.
I worry about those economic consequences, but I am also very concerned about the effects of the shutdown on children and families in our state – especially for low-income and vulnerable families. Fortunately, most federally funded programs for those families will continue at least through October, but the consequences could be very serious for vulnerable families if the shutdown lasts well into the fall. Read more
Workers in Wisconsin and across the U.S. must still cope with a relatively weak labor market. That is especially challenging for low-wage workers who are struggling with the declining value of the minimum wage, reductions in employer benefits like health care, and growing inequality. Those challenges are exacerbated in Wisconsin by budget decisions made by state lawmakers.
A new Wisconsin Budget Project issue brief examines how the how state budget choices are affecting low-wage workers in Wisconsin. It focuses primarily on the effects of the new budget bill, but also examines a few instances of how that bill continues or compounds the challenges for low-wage workers caused by the 2011-13 budget.
Some of the major effects include the following policy choices relating to health insurance, child care, taxes and unemployment insurance:
Making health insurance and care much more expensive for many parents now in BadgerCare
The 2013-15 budget bill cuts in half the income eligibility ceiling for adults participating in BadgerCare – reducing that cap from 200% of the federal poverty level to just 100%. Read more
In a long Q & A format interview in the Capital Times, I described a number of the faults of the 2013-15 budget bill. One of the defects I mentioned in that interview is that the bill employs a “Robin Hood in reverse” strategy for allocating resources. Because the article doesn’t provide much explanation of the reasoning behind that charge, I feel obligated to elaborate.
Actually, I think there is a very broad range of reasons for concluding that the recently enacted budget shifts resources from the poor to the rich. A new Wisconsin Budget Project paper explains ten of those reasons, which are summarized more succinctly below:
1) Diverting federal block grant funds for low-income families – The bill siphons off funding from the federal block grant known as Temporary Assistance to Needy Families (TANF) and indirectly uses those funds to build up the state’s surplus, which helped lawmakers enact larger income tax cuts that primarily benefit the wealthy. Read more