Honey, I Shrunk the Unemployment Benefits

Thursday, April 5, 2012 at 7:01 PM by

As of Saturday, the maximum duration of unemployment benefits available for jobless workers in Wisconsin will shrink by 3 months, from 86 to 73 weeks. That’s because Wisconsin’s unemployment level is low enough that our state no longer qualifies for a certain set of federally-funded unemployment benefits referred to as Extended Benefits. Nearly 8,000 out-of-work Wisconsin residents receive an average of $258 in weekly benefits through the Extended Benefits Program.

The number of weeks of unemployment benefits available is likely to shrink several times in coming months, under the terms of the Congressional compromise approved in February, which continued the federally funded extension.  Jon Peacock’s blog post last month, Length of Unemployment Benefits to Drop Sharply in April and Probably Again in Late May, explains the mechanics of why the length of jobless benefits is shrinking.  One key factor is that Wisconsin’s unemployment rate has slipped below 7.0 percent (even though Wisconsin has trailed well behind most of the nation in job growth).

As the following graph illustrates, the number of weeks of jobless benefits funded by the state will remain unchanged, but the total number of weeks available to an unemployed worker in Wisconsin is expected to drop from 86 weeks to 26 weeks by the beginning of 2013. However, if national unemployment rates remain stubbornly high, Congress should pass new legislation before the end of the year to avoid a precipitous drop-off in jobless benefits before the job market is much healthier than it is today.

Tamarine Cornelius and Jon Peacock

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