On May 7th, Sen. Nass announced in a press release:
The Department of Workforce Development has the power to end the emergency rule early on its own authority. Unfortunately, Governor Evers and his administration is ignoring the critical shortage of workers impacting almost every sector of the state’s economy. The legislature will act quickly to restore the work search requirement.
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We need every able-bodied person to re-enter Wisconsin’s workforce to rebuild our economy. In the current situation, nearly every person on UI should be able to find employment in a short time if required to seek work.
A man of action, Sen. Nass has scheduled a public hearing and then a vote to repeal the current work search waiver and pandemic-related able and available provisions for May 19th, starting at 1:30pm, in Room 411 South of the Capitol.
There are some obvious problems with what Sen. Nass is proposing here:
- “Impact” is not a verb (despite the folks at American Heritage Dictionary relenting on this issue).
- Wisconsin’s workforce is not 100% able-bodied. As pointed out in the history of the SSDI eligibility ban, more than 5% of the state’s workforce receives SSDI benefits. Is Sen. Nass accepting that the job search waivers continued to exist for SSDI recipients receiving PUA benefits? What about the very few disabled workers who do not receive SSDI benefits?
- Sen. Nass is presuming facts not in evidence.
First, Wisconsin over the last decade has experienced exceptionally slow economic growth, slow to declining job growth, and a stagnant or declining population relative to its neighbors. See this post or this post for examinations of recent economic and jobs statistics.
Second, Wisconsin’s unemployment benefits are not an issue with part-time work. As explained here, Wisconsin’s partial wage formula for unemployment benefits actually encourages unemployed workers to work because those workers can continue to collect their unemployment benefits as well as wages from their jobs. So, restaurant and retail workers where part-time jobs dominate, can usually receive both wages from their jobs and partial unemployment benefits as well as the $300 PUC payments. In other words, these workers would be working if they could, and they probably are working.
Jake had additional information about how unemployment eligibility has nothing to do with the national jobs data at this post, this post, and this post.
- This return to job search requirements is actually intended as a way to slow down the growth in wages paid to workers.
The playbook in Wisconsin over the past decade has been to increase the supply of potential workers, especially at the low end of the wage scale, in order to keep those wages from rising.
Note: Classic supply and demand curves indicate that the more supply of something means a lower price for that something. Likewise, when demand for something is up, the price for that item will increase. In labor economics, then, wages go down when the supply of labor goes up.
That was why legal and administrative changes in unemployment were undertaken in 2013 thru 2017. By making unemployment harder to receive, workers had to turn to low wage jobs immediately to make ends meet. And so, with the supply of workers seeking low wage jobs inflated, wages in Wisconsin were kept low.
Sen. Nass knows that demand for workers is up. So, all he can think about right now is to increase the supply of workers by making unemployment harder to get — right out of the playbook from the past decade.
The problems with this thinking, as noted above, is that unemployment benefits right now really have nothing to do with the labor supply problems at the moment. All that will really be achieved is some additional financial pain and heartache for folks who get caught up in the job search requirement.
At present, the emergency rule with pandemic-related provisions and waiver of the job search requirement, EmR2106, is slated to expire on 10 July 2021.
Maybe in July 2021, the economic impact of the pandemic may finally be waning. But, right now in the middle of May 2021, no one can say that the pandemic is over. Indeed, there are thousands of people still waiting on their unemployment benefits from losing jobs in March and April 2020. Forcing job search requirements again when vaccinations in the state are just over 45% as of May 16th is ridiculous.
The members of the this committee who should hear from you are: