Another reason why Wisconsin UI is faring so poorly: terrible job growth in 2019

Jake has the 2019 gold standard numbers, and they are just terrible.

Wisconsin’s rate of job growth started to decline in mid-2016, and has pretty much gone down since then, with the except of a Bubbly 6 months after the GOP Tax Scam was signed into law. But last year was a new depth, with barely more than 5,000 jobs added from December 2018 to December 2019, and we even slipped below 0 in November before a small rebound in the last month of 2019.

2019 jobs numbers

Jake compares the jobs picture in Wisconsin with Minnesota, and the comparison does not go well for Wisconsin.

Total jobs added, QCEW 2010-2019
Minnesota    330,103
Wisconsin    227,993
Difference   102,110

Jake further points out that the 2019 data for Wisconsin reveals that Dane County by itself is providing the job growth for the entire state.

Jobs added, Wisconsin 2019
Dane County    +7,446
REST OF WIS    -2,367

As Jake concludes:

This data sure seems to indicate that we could learn something by being more like Minnesota and Dane County, because that’s what was working before the COVID-19 recession hammered everyone starting in March. And today’s report is yet another blaring piece of evidence of just how much we have been held back during the Age of Fitzwalkerstan. It needs to be ended ASAP, and it goes well beyond changing who is in the Governor’s office.

Because job growth has been so anemic in Wisconsin, unemployment is that much more important as a wage replacement. But, as indicated previously, Wisconsin’s policies over the last decade have made unemployment much, much more difficult to get. Now with the pandemic and absolutely no jobs available at all, folks who have been suffering under meager job growth the past decade have absolutely nothing to fall back on other than unemployment. And, that system is designed to be difficult and cumbersome.

The Evers administration could start fixing this system by actually following the law rather than subverting it, as it is currently doing by denying PUA benefits to the disabled (see the discussion of SSDI in this post). And, the Evers administration could take a look at what our neighbor in Michigan is doing to make an equally difficult unemployment system at least less burdensome on claimants and the workers who have to administer that system. The results of these efforts in Michigan speak for themselves:

PUA payments the week ending April 25th

Chart courtesy of NELP

In comparison to Michigan, Wisconsin will only begin to start paying out PUA benefits next week.

Wisconsin remains . . .

Filing a claim?

Taxes and spending

Jake has a look at the latest WisPolicy Forum report on taxing and spending in the mid-west.

As Jake observes from the report, for the twenty-year period from 1997 to 2017, Wisconsin has led the mid-west in declining tax revenues, a commensurate decline in education spending, and a comparative increase in spending on Medicaid, corrections, and highways. These changes, Jake explains, are tied directly to the policy choices of recent years.

For example, a reason Medicaid spending is higher in Wisconsin because we refuse to take the expanded Medicaid in the Affordable Care Act, which would push those expenses onto the Feds instead of us (on a related note, a Pew report earlier this year placed Wisconsin 45th in the country for federal aid).

On the Corrections side, this is an obvious effect of the “lock em up” mentality of WisGOPs that has ended up with the state spending more on Corrections than the UW System. The “6th in the US” highway spending number can be connected back to a huge increase in local wheel taxes to fix roads that Scott Walker and the WisGOP Legislature refused to pay for.

Two things should be added to this post and the WisPolicy Forum’s tax report, however. First, the report is only dealing with changes in averages. So, the big shift in Wisconsin in the tax burden away from the wealthy and onto the shoulders of the middle-class is ignored. And, the over-reliance on property taxes in Wisconsin for funding local government and schools only makes this discrepancy worst, as property taxes based on a flat percentage are inherently regressive.

Second, several taxes are left out of this analysis completely, including unemployment taxes that employers pay on the first $14,000 of annual income paid to each employee. The 2018 Tax Measures Report has all of this tax information. Compared to the other fifty states, Wisconsin’s unemployment taxes are below average:

Tax amounts per covered employee in 2018

2018 Tax Measures Report at 64. As seen here, in 2018 Wisconsin’s average unemployment tax burden for employers was $255. For comparison, Minnesota’s was $340, Michigan’s was $352, and Iowa’s was $318.

Other measures likewise indicate that the unemployment tax burden on employers is exceptionally low in Wisconsin among mid-western states:

Average employer contribution in 2018 for every $100 in wages paid to an employee
Wis. 0.54
Minn. 0.56
Mich. 0.64
Iowa 0.69

For every dollar of tax paid in 2018, the amount going to
Benefits owed / Trust fund surplus
Wis. 0.75 / 0.25
Minn. 0.94 / 0.06
Mich. 0.63 / 0.37
Iowa 1.08 / -0.08

2018 Tax Measures Report at 62, 34, 33, and 26, respectively.

So, Wisconsin has the lowest unemployment tax burden of these four states, and 25 cents of every tax dollar being paid is going into the trust fund (only Michigan is saving more monies than Wisconsin for its trust fund).

Compared to these other states, then, employers in Wisconsin have little to complain about relative to employers in other mid-western states. And, this now very light tax burden in Wisconsin is very much the result of state policies that have made it difficult to impossible for employees to qualify for unemployment benefits or which make it difficult for employees to even files a successful claim.

The Wisconsin October 2019 jobs report is not good

The October 2019 jobs report has almost no information about the monthly jobs picture and mostly discusses labor force participation rates:

The Department of Workforce Development (DWD) today released the U.S. Bureau of Labor Statistics (BLS) preliminary employment estimates for the month of October. The data shows that Wisconsin added 17,200 private-sector and 16,500 total non-farm jobs from October 2018 to October 2019. Wisconsin’s labor force participation rate in October was 67.1 percent, while the state’s unemployment rate in October was 3.3 percent. The national unemployment rate for October 2019 was 3.6 percent.

• Place of Residence Data: Wisconsin’s labor force participation rate in October was 67.1 percent in October, 3.8 percent higher than the national rate of 63.3 percent. Wisconsin’s unemployment rate in October was 3.3 percent, 0.3 percent lower than the national rate of 3.6 percent.

• Place of Work Data: Wisconsin added 17,200 private-sector and 16,500 total non-farm jobs from October 2018 to October 2019. From September 2019 to October 2019 Wisconsin’s private-sector and total non-farm jobs declined by 1,100 and 1,200 respectively.

Luckily, Jake looks at the actual data, and there are a lot of negative numbers:

Wisconsin jobs change
Oct 2019
-1,200 total jobs, -1,100 private sector, -1,300 manufacturing

Sept 2019 revision
-1,200 total jobs, -700 private sector
-700 manufacturing

Revised Sept totals
+600 all jobs, +100 private sector, -2,900 manufacturing

Oct 2018 — Oct 2019
+16,500 total jobs, +17,200 private sector
-7,700 manufacturing

Jake further observes that Wisconsin now has “only 100 more manufacturing jobs in Wisconsin than we had 2 years ago” and that “the number of ’employed’ Wisconsinites has declined by more than 30,000 since peaking in early 2018, and is now at its lowest level in since Trump took office in January 2017.”

Wisconsin has some serious jobs troubles and needs some advice from Yoda.

Yoda

Labor and employment documents and databases

Courtesy of Stuart M. Basefsky at Cornell University:

National Conference of State Legislatures (NCSL)

LABOR AND EMPLOYMENT [DOCUMENTS & DATABASES] as of 15 August 2019

http://www.ncsl.org/searchresults/issearch/false/kwdid/400.aspx

Disability Employment Legislation

NCSL’s Disability Employment Database tracks current bills and legislation in all 50 states addressing employment opportunities for people with disabilities. It includes accessible transportation, inclusive hiring, special education, subminimum wage, and other disability employment issues.

Labor & Employment: Bill Summaries/Databases | August 14, 2019

National Employment Monthly Update

Approximately 164,000 jobs were created in July 2019, and the national unemployment rate remained at 3.7%, according to the Bureau of Labor Statistics. Employment increased in professional and technical services, health care, social assistance, and financial activities.

Labor & Employment: Reports | August 02, 2019

Occupational Licensing Legislation Database

This page contains a database that include occupational licensing legislation from all 50 states.

Labor & Employment: Bill Summaries/Databases | July 31, 2019

Disability Employment

NCSL offers a number of resources on employment policy for people with disabilities. This includes state laws relating to state hiring practices, accessible transportation policy, inclusive apprenticeships, and workers’ compensation laws.

Labor & Employment: Articles/Briefs/Newsletters | July 16, 2019

State Unemployment Rates | May 2019

Unemployment rates in May were significantly lower in six states (Colorado, New Jersey, Ohio, Oregon, Texas, and Vermont), higher in two (Nebraska and South Carolina),and were generally stable for the rest of the 42 states and the District of Columbia, according to the Bureau of Labor Statistics.

Labor & Employment: Reports | July 05, 2019

The National Occupational Licensing Database

A national database of state regulations developed to contribute to the understanding of the variation in occupational licensing burdens across the country and particularly among professions for which these laws may pose unnecessary barriers to employment.

Labor & Employment: Bill Summaries/Databases | June 19, 2019

2019 NCSL Legislative Summit Pre-Conference: Implications of Living to 100: Preparing State Policymakers

Join policy innovators as we take stock of demographic changes and discuss how systems and supports may need to change to sustain a 100-year life. Explore topics including health and long-term care, employment and retirement savings opportunities, and designing physical communities and facilities that are inclusive for people of all ages.

Labor & Employment: Meetings | June 11, 2019

[LegisBrief] Boosting America’s Rural Workforce

Rural counties across the U.S. continue to suffer from a shrinking population and workforce. To keep rural communities and economies thriving, state policymakers are experimenting with a variety of different policy solutions to attract and retain residents.

Labor & Employment: LegisBrief | June 06, 2019

2019 Western States Policy Meeting Resources

Information and resources presented by experts from the 2019 Western States Policy Meeting: Barriers to Employment for People with Disabilities

Labor & Employment: Meetings | June 05, 2019

Workers’ Compensation: Keeping Injured and Ill Workers in the Workforce

When workers are injured on-the-job, workers’ compensation provides insurance coverage for their treatment and wage replacement benefits. When workers have extended absences from work they are less likely to ever return to work and often turn to federal disability benefits.

Labor & Employment: Reports | May 24, 2019

Final job numbers for 2018 are in

Jake has the details, and they are not pretty.

Job growth Dec 2017 - Dec 2018, QCEW
U.S. +1.5%
Mich +1.04%
Minn +0.91%
Ind. +0.88%
Wis. +0.60% <--
Ohio +0.549%
Iowa +0.547%
Ill. +0.31%

For 2018, the mid-west was well behind the rest of the nation. Only Michigan, with the money for auto manufacturing being pumped into that state, broke 1% job growth.

National headlines about a strong economy simply do NOT apply to Wisconsin, Ohio, Iowa, and Illinois.

Finally, Jake has the final job numbers for Gov. Walker during his time in office

All job growth, Dec 2010 - Dec 2018
Minn +319,619
Wis. +222,260

In 2010, Minnesota had fewer people and fewer jobs than Wisconsin. By the end of 2018, Minnesota surpassed Wisconsin in both categories. Wisconsin’s austerity put a brake on growth while a focus on middle-class growth and investment paid dividends in Minnesota, allowing that state to take the lead over Wisconsin.

Jake also has some information about current trends in manufacturing growth, and the news is NOT good.

Manufacturing and GDP, 2007-2018

This information, when combined with information from UW economist Menzie Chinn, indicates that manufacturing in the mid-west is already in decline. As Jake sums up this bad news:

the 2016-type slowdowns in manufacturing and the Midwestern economy as a whole are starting all over again. Except now we have a higher US budget deficit, with less room for upside as unemployment is likely as low as it can get, and more trade restrictions and adjustments are coming in the near future. Ruh roh.

Strangely, now seven days later, there are still absolutely NO reports in mainstream media about these job numbers or economic trends.

Here is the news that I could find when searching for “qcew wisconsin job numbers” that have to do with jobs:

If anything, further job cuts will compound the decline in jobs that seems already underway.

Low unemployment rates and low unemployment benefits — record lows for a reason

Mark Sommerhauser’s article about possible changes to criminal prosecution of unemployment fraud has a remarkable chart detailing the roller coaster plunge in unemployment benefits in Wisconsin since the end of the great recession.

UI benefits chart

In 2018, only $1.11 million in first-week unemployment benefits were paid out in Wisconsin. Here are some numbers to provide some perspective on this decline in unemployment benefits.

Historical comparisons

At the January 2019 Advisory Council meeting, the financial report included some jaw-dropping numbers regarding the stellar decline in unemployment taxes employers pay and the even steeper drop in unemployment benefits being paid to claimants. Tom McHugh explained during his presentation that benefit payments in 2018 had not been this low prior to 1994.

So, a comparison between the years 2018 and 1994 seems in order. Monthly claims history data reveal:

| Year | Init. claims | Benefits paid |
| 1994 | 430,452      | $405,625,564  |
| 2018 | 283,398      | $397,746,075  |

So, while the amounts of benefits paid are relatively close — a difference of around $8 million — there is a difference of 147,000 initial claims between the two years. These numbers mean that in 2018 the Department paid on average $1403 in unemployment benefits for each initial claim, whereas in 1994 the Department paid on average $942 in unemployment benefits for each initial claim that year.

In part, the lower number in 1994 exists because the maximum weekly benefit that year was only $243, whereas in 2018 the maximum possible weekly benefit rate was $370.

But, this data also includes information about the weeks being claimed versus the weeks that are actually compensated.

| Year | Weeks claimed | Weeks compens. | Prct. |
| 1994 | 2,589,895     | 2,443,988      | 94.4% |
| 2018 | 1,659,861     | 1,352,076      | 81.5% |

In 2018, just over 81% of the weeks being claimed were leading to actual payment of unemployment benefits, whereas in 1994 fully 94.4% of initial claims led to the payment of unemployment benefits.

The available weekly claims data for these years adds another eye-popping wrinkle to this comparison: the size of the labor force.

| Year | Init. claims | Covered emply. |
| 1994 | 452,526      | 2,301,412      |
| 2018 | 279,912      | 2,817,338      |

Note: changes in the number of initial claims being filed likely exist because of what is being measured: weekly versus monthly claims data.

So, in 2018 there was a drop of nearly 62% in initial claims from 1994 even through the number of covered employees actually increased by more than 500,000. If eligibility for unemployment benefits was the same in 2018 as it was in 1994, there should obviously have been more unemployment claims given the 500,000 employee increase in the eligible labor force. But, rather than an increase in claims in 2018 there has instead been sharp dive in unemployment claims.

Someone might argue that the workforce in Wisconsin has substantially changed from 1994 to 2018. That explanation does not hold much water.

Union sector comparison

This chart shows that there have been slight declines in manufacturing from 1994 to 2017 in Wisconsin as a percentage of the workforce (from 25.44% of the workforce to 21.21% of the workforce) as well as in public sector employment (15.06% to 12.84% of the workforce). But, the real changes have not been so much in the makeup of the workforce so much as in the percentage of who belongs to a union. Only private construction has NOT seen a dramatic drop in both union coverage and union membership from 1994 to 2017. And, those drops are by half or more from what existed in 1994. So, the decline in unionization is at least strongly correlated with the decline in Wisconsin employees receiving unemployment benefits in this state.

Fraud comparisons

The other major factor at play with the decline in unemployment benefits is the increased prosecution by the Department for alleging fraud.

As the Department’s fraud allegations are a relatively new phenomena (while unemployment fraud has always existed as a category, prosecutions did not begin in earnest until this last recession), this data cannot provide a look back all the to 1994. But, this data does reveal what the Department has been doing since 2011.

Initial claims and fraud cases by year

Here, the number of fraud cases as a percentage of total initial claims actually increased in 2013 and 2014, declined in 2015 and 2016, and has held steady at 1.67% of total initial claims in 2017 and 2018.

The over-payments being assessed as percentage of benefits being paid out, however, actually increased slightly in 2018, going from 1.11% of all unemployment benefits paid out in 2017 to 1.18% in 2018.

over-payments assessed by year

The decline in collections in 2018 from 2017 was more sizable, dropping from 3.14% of all benefits paid out to 2.58% of all unemployment benefits paid out in 2018.

over-payments collected by year

Noticeably, the collection of over-payments allegedly connected to fraud were in 2018 still more numerous than collections for non-fraud over-payments. Only in 2011, the first year of the Walker administration, was the ratio of fraud to non-fraud over-payment collections well below 100% (at 55.51% that year).

What’s next?

This month, the Department announced that unemployment rates are at a record low of 2.8%. As Jake has described these numbers, this low unemployment rate masks significant job losses in Wisconsin. Wisconsin is trailing the rest of the mid-west in job growth (and the mid-west itself as a region is trailing the rest of the nation in job growth).

The 1994 numbers described above indicate that while the state’s economy has not actually changed all that much from what existed in 1994, the unemployment system itself has markedly change. Even with a maximum weekly benefit rate in 2018 that is $127 higher than what existed in 1994, total unemployment benefits being paid out are about the same in 2018 in absolute dollars (i.e., NOT adjusted for inflation), 24 years later. This stagnation is shocking.

The big change with unemployment during the last eight years or so is the expansive and aggressive charging of unemployment fraud by the Department for accidental claim-filing mistakes. The case law is now over-flowing with decisions about how the Department has charged claimants with fraud for accidental claim-filing mistakes, defended those charges despite all evidence to the contrary, and even sought retribution against those who dared challenge the Department’s wishes on this front.

And, it is obvious to anyone filing unemployment benefits today about how complicated and difficult the claims-filing process has become. It is now all too easy for someone to make an accidental mistake during their weekly claim certification and then find themselves facing charges for unemployment concealment simply for not understanding what is being asked.

Note: this confusion and resulting mistakes ares even more likely when language and technology barriers are considered. Unemployment claims are on-line only now and STILL only in available English.

Finally, the decline in union representation and coverage from 1994 to 2018 indicates that the institutions that could have raised alarms and fought back against these changes to the unemployment system today lack the strength and support to conduct such a fight. As a result, these fundamental and far-reaching changes to the unemployment system have occurred without significant challenges.

Workforce statistics in Wisconsin, Minnesota, and Colorado

Jake again has another excellent report on employment and unemployment numbers.

A recent report comparing Minnesota and Wisconsin leads Jake to point out how Minnesota job growth has outpaced Wisconsin, and that Wisconsin has trailed and even slowed when compared to both national averages and Minnesota’s employment growth. Yet, the mystery is that Wisconsin and Minnesota have similar if not identical unemployment rates. The North Star report concludes about Wisconsin:

To a significant extent, Wisconsin’s low unemployment rate is driven by a weak job market that discourages workers from entering or staying in the labor force.

I disagree with this conclusion. Folks in Wisconsin that remain here are staying in the workforce. They just are not collecting unemployment benefits. Rather, as I previously described, they are skipping unemployment completely and using low-wage, service work as a substitute for unemployment benefits. Hence, the unemployment rate is low in this state because it either forces workers to find new jobs immediately whatever the pay being offered or it discourages workers from staying in Wisconsin when one job ends and they have options for other jobs in other states.

In this regard, the population statistics Jake presents about Minnesota, Wisconsin, and Colorado are eye-popping.

At the start of 2011, when Walker and Dem Governors Mark Dayton (Minnesota) and John Hickenlooper (Colorado) took over their respective states, Wisconsin had more people living and working in their state – and a lot more when compared to Colorado (whose unemployment rate was higher than Wisconsin’s at the time, at 8.8%).

Household employment, Jan 2011
Wis. 2,831,200
Minn 2,737,400
Col. 2,486,600

Population, 2011
Wis. 5,705,812
Minn 5,345,967
Col. 5,116,411

Move ahead to today, and that gap has closed. To the point that Colorado may pass Wisconsin by 2020 in both stats if the trend continues.

Household employment, Aug 2018
Wis. 3,083,200 (+252,000)
Minn 3,015,360 (+277,960)
Col. 3,000,250 (+515,650)

Population 2017
Wis. 5,795,483 (+89,671)
Minn 5,576,606 (+230,639)
Col. 5,607,154 (+490,743)

And the growth in the Labor Force over the same period also reflects these trends.

Change in Labor Force Jan 2011- Aug 2018
Wis. +99,540
Minn +163,715
Col. +364,600

These numbers show that household employment in Wisconsin was nearly 3X population growth, whereas similar ratios for Minnesota and Colorado are approximately 1:1. The story in Wisconsin, then, is that folks are not staying around (the anemic population growth), and those that do are forced to take whatever work is available to them rather than trying to find the right job after collecting unemployment benefits for a few weeks (the low unemployment rate).

Minnesota and Colorado are creating modern economies that attempt to improve the lives of all. Hence, folks are flocking to those states, and job growth is matching their fast-paced population growth. Wisconsin, on the other hand, is well on its way to creating a backwater economy. Forward?

 

Wisconsin jobs numbers still poor

Jake’s blog is providing excellent analysis of DWD’s job numbers. So, see his September review of the “gold standard” job numbers and his examination of an ALEC report that tries to claim Wisconsin is doing better than Minnesota (short answer: Minn. is doing better).

As Jake writes:

I know administrations of all parties try to put a positive face on how things are going in their state/country. But when that crosses the line into blatantly dishonest campaign cheerleading that can be taken apart with 30 minutes of googling the source data, I get offended. And there are few more defining characteristics of the Walker Administration than offensive cynicism at taxpayer expense.

Wages are flat because unemployment IS so low

The New York Times had a feature on February 2nd on why wages continue to lag despite the extremely low unemployment rates at the moment.

There is a basic presumption in this article that is no longer valid, however: namely that the unemployment rate today is the same kind of unemployment rate from 10 or 20 or even 30 years ago.

In Wisconsin, the news for some time has been how the state’s unemployment rate and benefit payments to claimants are at record lows. For instance, a January 2018 press release from the Department includes the following observations:

Other indicators of the state of Wisconsin’s economy include:

  • Initial UI claims ended 2017 at their lowest level in the last 30 years.
  • Continuing unemployment claims ended 2017 at their lowest level since 1973.

See also this October 2017 press release. What is notable here is that this decline is well known and part of an apparent plan.

As previously noted here, this decline is occurring because of Department efforts at making it harder for the unemployed to qualify for unemployment benefits and then disqualifying them for not jumping through some state requirement fast enough or alleging unemployment fraud for nothing more than simple claim-filing mistakes.

But, the data in Wisconsin does not explain what is happening nationally. The National Employment Law Project has already noted how unemployment has changed significantly across the nation the last few years. But, thanks to the efforts of some smart folks in Pennsylvania, national unemployment data is now available in a highly convenient format and which produces eye-catching charts.

NOTE: I cannot say enough good things about this unemployment data explorer. Pretty much any unemployment data currently being collected is now available for quick analysis in a chart. Moreover, you can easily see and download the data being used to create the charts. Excellent work.

This data provides some charts that can compare what is happening from state to state. For instance, separation data (how claims are denied because of a quit or a discharge for which misconduct/substantial fault is found) presents the following set of charts:

50-state denial rates from 2005 to 2017

The red line in these charts is the national rate. As obvious, this chart shows that there is a great deal of variation from state to state. And, because there have been big changes in the number of claims being filed, this data is somewhat incomplete. SeeEmployer UI taxes declining because more UI claims being denied” (24 August 2016) for an examination of how changes in the number of claims being filed affect Wisconsin’s claim-filing numbers.

But, the variation among the states also reveals some obvious increases in denial rates in Kansas, Maryland, New Mexico, South Carolina, and Wisconsin. On the other hand, Alabama, Colorado, Florida (a surprise), Mississippi, New Hampshire, New Jersey, and New York show significant drops in denial rates.

This 50-state data gets even more interesting when “other” reasons for denying unemployment benefits are examined:

50-state denial rates for other reasons from 2005 to 2017

NOTE: “Other” reasons include, for instance, a claimant not being able and available, not completing the required job search actions for that state, not attending call-in or meeting requirements a state has mandated, or not registering for various state-mandated services. Wisconsin specific data on these issues “other” denial reasons is available here from this prior post on the financial impact of Wisconsin’s substantial fault disqualification. Outside of able and available status, these “other” reasons generally encompass requirements an individual state creates as part of its claim-management bureaucracy for supervising the unemployed.

Again, the red line in this chart is a national average of cases being decided for “other” reasons. As evident here, there has been an increase (and even an explosion in some states) in “other” denial reasons the last few years in Florida, Louisiana, Massachusetts, Michigan, Mississippi, Montana, New Mexico, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, and Tennessee. Indeed, the national trend of these “other” cases increasing over time would probably be much more significant if the extremely large populations of Texas and California were removed from the analysis (Texas has been flat, and California has actually declined significantly). As such, national data is masking significant changes in the availability of unemployment benefits in numerous states.

Of course, this table is simply showing the number of cases being decided for “other” reasons. If all of these cases did NOT lead to a denial of an unemployment claim, then there is essentially no harm, no foul in these cases. But, the actual denial rates for “other” reasons reveal a not-so innocent story.

50-state denial proportion for other reasons from 2005 to 2017

Where California declined and Texas increased slightly and then plateaued, Delaware, Florida, Iowa, Illinois, Indiana, Louisiana, Massachusetts, Maryland, Michigan, Mississippi, Montana, North Carolina, North Dakota, New Mexico, New York, Ohio, Oklahoma, Pennsylvania, South Carolina (showing shocking jumps from year to year), Tennessee, Utah, Wisconsin, and Wyoming have seen obvious increases in denial rates since 2005.

These other reasons for the most part did not exist until very recently and almost none go back a decade in significant numbers in any one state. The Wisconsin data on this issue, for instance, is telling: cases involving profiling registration requirements were in single or low double-digits until 2015 when they sky-rocketed to hundreds and then thousands. What this last chart reveals is that numerous states have essentially created numerous mechanisms for disqualifying claimants even when those claimants are initially eligible for unemployment benefits.

Given that we are all human and can only take so much abuse before moving on, it is extremely likely that most folks have simply stopped filing unemployment claims because of the obstacles states have placed on their eligibility and not because they have found the jobs they have wanted all along.

So, if states are making it much, much harder to receive unemployment benefits when filing a claim, then the low unemployment rates of today are NOT comparable to the low unemployment rates of yesteryear or even to unemployment rates of a decade or so ago. Instead of creating a question about how low wages and low unemployment rates can co-exist, the low unemployment rates of today may actually be placing a brake on wage growth: the state unemployment policies at issue here increase the supply of individuals looking for any work in place of their missing unemployment benefits. That increase in the labor supply, as a result, creates downward pressure on wages. At least, that is what I learned in labor economics 101.