Fluctuating Unemployment Rate Triggers Shorter Benefits
The maximum duration of federally funded unemployment benefits will drop in Wisconsin next month because of a reduction in the state’s unemployment rate over the last several months. We’ve been following this story for the past year, as federal policy changes and a slow decline in unemployment have triggered several contractions in the length of unemployment insurance (UI) benefits.
The decline in Wisconsin’s unemployment rate has followed a roller coaster path this year, which caused the duration of benefits to fluctuate as the 3-month average unemployment rate dropped below 7.0% early last summer and then rose back above that level in the fall. Because it’s again below 7% (currently 6.7%), the maximum length of benefits for the long-term unemployed will drop in February to 54 weeks, from the current limit of 63 weeks.
According to a letter sent to legislators Friday by the Department of Workforce Development, approximately “10,500 Wisconsin UI claimants who exhaust benefits in the federal EUC Tier 2 program during the weeks following February 9, 2013 will not be able to move into Tier 3, per the federal government.”
Although I’m very sorry to see the duration of benefits reduced, I think there’s some logic to phasing down these benefits as the economy improves. That’s a political compromise that is far preferable to the abrupt elimination of all the federally funded unemployment benefits, which was narrowly averted by the fiscal cliff legislation enacted a few weeks ago.