Proposal Could Cut Maximum Number of Weeks of Unemployment Benefits By Half or More
A proposal by Republican state legislators could have the effect of cutting the maximum number of weeks of unemployment benefits by half or more.
The new proposal would link the maximum duration of state unemployment benefits to the state’s unemployment rate. In all but the worst economies, the proposal would result in Wisconsin offering fewer weeks of unemployment benefits than the current maximum of 26 weeks. The table below shows the maximum number of weeks of unemployment benefits proposed at each unemployment rate.
If this policy had been in place over the past decade, jobless workers would have had access to far fewer weeks of state-funded unemployment benefits. The chart below shows the number of weeks of unemployment benefits that would have been available during each quarter of the last decade. The current maximum of 26 weeks of state-funded unemployment benefits would have been available only at the peak of the recession, if this policy had been in place. For a period of several years in the middle of the decade, only 12 weeks of unemployment benefits would have been offered had this policy been in place.
Reducing the number of weeks available for state unemployment benefits would reduce the number of weeks of federal benefits as well. Currently, jobless workers in Wisconsin qualify for 26 weeks of state benefits and 28 weeks of federal benefits, for a total of 54 weeks. If this benefit cut proposal were in effect today, Wisconsin workers would be eligible for a maximum of 22 weeks of state benefits and 24 weeks of federal benefits, for a total of 46 weeks. In other words, workers would lose out on four weeks of state benefits and four weeks of federal benefits, as shown in the chart below. Losing out on federal benefits not only harms workers, it also limits the amount of federal funds that flow into the state and boost the economy.
The proposal to reduce the number of weeks of unemployment benefits available is part of a broad package of recommendations that a number of Republican legislators have submitted for consideration by the Unemployment Insurance Advisory Council, which advises the Department of Workforce Development and legislature on matters related to unemployment insurance. The Council has endorsed some of the changes proposed by GOP legislators but has not endorsed the reduction in the length of benefits.
Traditionally, the legislature has given a great deal of weight to the opinions of the Advisory Council when considering legislation related to unemployment insurance. There are several reasons for that practice, including the fact that the Council has more experience and expertise on these issues, but also because the consensus process used by the Council makes unemployment insurance tax rates and benefit levels much less volatile than would be the case if these policies shift whenever control of the Legislature and Governor’s office change hands.
Whether the legislature continues to accept the Council’s advice will be tested in the coming months, as the Assembly and Senate consider the alternative recommendations, including the GOP plan to shrink the duration of unemployment insurance benefits.