UI Council Recommends Federally-Funded Extension of Jobless Benefits

Friday, June 24, 2011 at 12:01 AM by

Following up on our previous post about today’s meeting of the Unemployment Insurance Advisory Council, the Council voted unanimously to support a change in state law that would allow for the drawdown of an estimated $88 million dollars in federally-funded unemployment insurance (UI) benefits. The Council, made up of half labor and half management representatives, advises the legislature and Governor on changes to unemployment policy. 

Prior to the meeting, it was unclear whether the Council could reach consensus on drawing down the federal extended benefits. James Buchen, leader of the management side of the Council, previously indicated that he and other management representatives might not support an extension of benefits. Buchen recently told the New York Times that employers in Wisconsin perceived that the unemployed have not been taking available jobs, choosing instead to stay on unemployment.  At today’s meeting, however, Buchen struck a more conciliatory tone, saying that the current weakness in the economy warrants an infusion of federally-funded extended benefits.

A short Wisconsin Budget Project paper released this morning describes the importance of restoring the extended benefits program (which ran out in WI in April), and it counters the argument that jobless benefits cause a significant increase in the length of unemployment. The paper notes that unemployment benefits provide a number of advantages to workers (and the economy), providing them with support as they search for another job and boosting the economy with $1.61 in economic activity for every $1 in benefits spent.

The federally-funded extended benefits were first authorized by the Recovery Act in 2009, and Congress voted late last year to continue the program. However to continue to be eligible, many states needed to make a slight change in their statutes. On Monday, a very good Journal Sentinel article by Jason Stein about the extended benefits option reported that Wisconsin is one of just a handful of states that could get the federally-funded extension but has either decided not to do so or has yet to act on the issue.

While today’s vote by the Council is encouraging news for the estimated 10,000 workers eligible for these extended benefits, it’s unclear if or when the legislature will pass the recommended change in the statutes that would put the change into effect and start the distribution of extended benefits. The legislature is nearing the end of its spring session, with additional dates for legislative action not until September. The legislature could take up the law change outside of those dates by calling itself into extraordinary session, or the Governor could call them into a special session to take up the change.

Action by the Council to recommend this change in the law is a clear recognition of the value of unemployment benefits, particularly during a period of prolonged economic duress. Legislative approval of the consensus position would benefit those who need it most, keeping jobless workers and their families out of poverty and strengthening Wisconsin’s economy without any impact on the state coffers.

Ben Nerad and Jon Peacock

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