The Bad News about the Good News

Monday, August 9, 2010 at 3:22 PM by

Wisconsin’s unemployment rate is inching downwards. That’s the good news.

Unfortunately, the lower unemployment rate means that Wisconsin residents will be eligible for fewer weeks of unemployment benefits: a maximum of 93 weeks, down from 99 weeks. That’s the bad news. What’s more, if our unemployment level continues to decrease (good news!), we may soon drop down to a maximum of 86 weeks of unemployment benefits (bad news).

Unraveling the reasons for the change in the number of weeks of benefits requires a little bit of math and a high tolerance for acronyms. The equation looks like this: 93 weeks of benefits available in Wisconsin = 26 weeks of UI + 47 weeks of EUC + 20 weeks of EB. Let’s take a closer look at that equation to break it down into understandable components.

Those 93 weeks of unemployment benefit – or 99, or 86 – are actually a combination of benefits from three separate programs. The first 26 weeks of benefits are paid for by the state through Unemployment Insurance (UI), with the federal government covering administration costs. There’s been a lot of changes made in unemployment benefits available at the federal level since the start of the recession, but the number of weeks of benefits available through UI have stayed constant pre- and post-recession.

Second, unemployed workers who exhaust their 26 weeks of state benefits are eligible for Emergency Unemployment Compensation (EUC). This is a 100% federally funded temporary program that was enacted in 2008 and extended several times, with the current qualifying period ending in November 2010. The number of benefit weeks available in a particular state depends on its unemployment rate. Wisconsin’s three month average just slipped below 8.5% (good news), meaning we drop down from a maximum of 53 weeks of EUC benefits down to 47 weeks (bad news).

Third, unemployed workers who exhaust their EUC benefits become eligible for Extended Benefits (EB). The cost of these benefits is normally split between the state and the federal government, but the Recovery Act temporarily shifted the total cost of the benefits to the federal government. As with EUC, the number of EB weeks available in a particular state depends on its unemployment rate. Unemployed workers in Wisconsin currently qualify for 20 weeks of EB benefits. However, once July’s unemployment rate is released, Wisconsin’s three-month average could easily slip below 8.0% (good news), which would reduce the number of EB weeks available to 13 (bad news).

Perhaps it takes a pessimist to find the bad news about the good news, but the reduced number of weeks of benefits has a real impact on Wisconsin families. With jobs still scarce, many unemployed workers depend on unemployment benefits to make ends meet. It would be truly good news to hear that Wisconsin’s economy and labor market are well on the road to a full recovery, but until then it will be hard to avoid seeing the dark cloud around the silver lining.

Categories: Blog, federal issues, Recovery Act, unemployment benefits | Comments Off on The Bad News about the Good News

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