Jake has been on a tear with economic news for Wisconsin, and it has been too long since I provided an update on this front. So, I’m going to piggyback off of his efforts.
In general, Wisconsin has seen both solid job AND wage growth the past few years.
While the beginning of 2023 saw a slight slow down, the latter half of 2023 saw significant income growth in the state, especially when compared to other Midwestern states.
As Jake points out, however, the annual numbers for Wisconsin have not been that impressive.
But on an annual basis for growth in earnings, we are not as impressive – smack-dab in the middle of the Midwest at 4.6%. We also lagged the US rate of 5.6% for earnings growth. Likewise, our annual income growth of 4.4% falls behind the U.S. rate of 5.2%, which leaves us at 41st in the nation (although we are also penalized due to Wisconsin’s lower population growth vs the rest of the US).
In large part, Jake shows that this “growth” is tied directly to the population “growth” in Wisconsin. Within the state over the last three years, over 20,000 people have left Milwaukee county for other parts of the state (mostly neighboring counties). So, there has been essentially some shuffling of the state’s population “cards.” As a whole, Wisconsin is really only gaining people in Dane and Milwaukee counties (with the out-migration in Milwaukee county essentially canceling out the gains in this one county).
Dane County also gained nearly 6,500 people from international migration, and Milwaukee County added nearly 7,700. Those two counties make up well more than half of the nearly 25,000 that net immigration has added to the state’s population since 2020.
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Dane [nearly 6,000 births] and Milwaukee [nearly 7,000 births] Counties are also on the right side of the third leg of population changes, which is the “natural change” of births vs deaths. Both Dane and Milwaukee have sizable gains in this category, and the counties that house Green Bay and (most of) Appleton have also added more than 1,000 people in the 2020s through more births than deaths.
But the state as a whole has had over 2,300 more deaths than births, with much of those losses over this 3-year period being chalked up to the thousands of excess deaths that happened during the pandemic years of 2020 and 2021. I’ll also note that this has mitigated some of the gains through migration that some of Wisconsin’s counties have seen, with Waukesha County suffering the largest number of losses.
This slow population growth has been putting a crimp on job growth. Jake explains that the February 2023 drop in the state’s unemployment rate from 3.2% to 3.0% “was entirely due to those 4,900 people leaving the Wisconsin labor force.”
The charts Jake has for jobs in general, construction, manufacturing, and the leisure and hospitality sectors in Wisconsin all show rapid growth in 2022 and much slower job growth in 2023. The ceiling created by an aging/retiring workforce and less young people in the state is essentially capping job growth after a post-pandemic rebound, particularly in the construction and manufacturing sectors. Long-term economic growth, then, will be tied to growing the state’s workforce. As Jake explains:
It seems to me that we had two strong years of job growth in 2021 and 2022, but 2023 saw that slow down. While we are still adding jobs, and having a 3.0% unemployment is unquestionably a good thing, we need to make sure that we are expanding our capacity and attractiveness to workers and families to want to come here and stay here. Or else we could well stagnate in 2024, and be limited in how much more we can keep this good thing going.
The good news is that the labor shortage has led to significant wage growth in 2021 and 2022 in the state, something that had been missing throughout the 2010s. Whether that growth in wages can keep pace with the rising cost of housing in Wisconsin is another issue that needs addressing.
Update 11 July 2023: Jacob Resnick of Wisconsin Watch has done some digging on the billionaire lobbying groups pushing these no-reform proposals. One of the key quotations from the article:
“One of the fastest ways that we can deal with Wisconsin’s ongoing workforce shortage is to keep people who are still in the labor market, those recently unemployed, productively engaged in the workforce,” Gibbs told members of the Assembly Committee on Workforce Development and Economic Opportunities.
The problem that this billionaires’ lobbyist fails to acknowledge, as noted below, is that unemployment has nothing to do with any worker shortage.
Update 17 April 2023: I testified at the committee hearing on April 12th for most of these bills. For some unknown reason, my written testimony has not been included in the committee materials for any of the bills.
With the April 2023 election, an incredibly general, state-wide advisory ballot question about people on welfare needing to work passed by wide margins.
The Wisconsin legislature has taken that passage as a message to suddenly revamp and fine tune unemployment eligibility without actually fixing any of the problems with unemployment claim-filing in this state.
First some background.
It is vital to know that unemployment claim-filing is now in 2023 much, much different from what used to occur.
As this data reveals, claim-filing in Wisconsin had plummeted just before the Covid-19 pandemic in 2020. In 2018, there was a record low of initial claims filed by individuals, and in 2019 there was a record low in the number of people who were paid unemployment benefits in Wisconsin.
Compare these numbers with what existed in 2007, a “normal” economic year when initial claims and weekly certifications were around 10 questions each and could be filed via a phone call. In that year, there were 638,548 initial claims, and 332,982 claimants were paid benefits that year (more than one out of every ten workers received unemployment benefits that year).
Obviously, the Covid-19 pandemic reversed that trend. But, that reversal was incredibly short-lived. In 2022, new record lows for claimants paid benefits and for initial claims filed in the state were set. Initial claims in 2022 were roughly 89% of the number of initial claims filed in 2019, and paid claimants in 2022 were under 90% of 2019 levels. And, this trend of ever declining unemployment has continued into 2023. As of week 13 of 2023, initial claims are running at around 84% of 2022 levels. So, 2023 is likely going to set still another record low for initial claims and in benefits paid to claimants.
At the same time that unemployment claim-filing has declined and declined and then declined some more, the labor force in Wisconsin has been relatively stagnant and unchanging throughout this time period.
In 2007, there were 2,732,290 workers in Wisconsin, and in 2022 there were 2,754,514 workers, an increase of only 22,224 after 15 years.
So, unemployment has become less and less an issue for Wisconsin workers. The data right now indicates that the vast majority of claims are filed in the winter months, when scores of businesses like landscaping, road building, some construction, and others cannot operate because of winter conditions.
Into this picture of unemployment claim-filing comes the state legislature now with a bunch of sticks to beat over the head of the few people still seeking unemployment benefits. Here is a rundown of these proposals.
This bill provides new ways to disqualify claimants for misconduct for:
any damage to employers’ property and records done unintentionally, by accident,
possible violations of employers’ social media policies, and
violations of employers’ absenteeism policies pursuant to Beres.
This expansion of Beres and accidental damage raise a serious risk of Wisconsin employers losing their FUTA tax exemption, because the misconduct penalty of lost wages in a benefit year can only be applied to intentional employee conduct.
As noted by the Commission in its briefing in Beres, this employer-determined misconduct for non-intentional absences (in both Beres and Stangel, the employees were absent because of illnesses over which they had no control) ran the risk of Wisconsin being found by the US Department of Labor to no longer be in compliance with federal requirements for unemployment. That lack of compliance could well lead to Wisconsin employers losing a tax credit and seeing their federal unemployment taxes jumping from a 0.5% to 7.0% tax rate — quite a jump.
As to the social media violation, this proposed change is basically incomprehensible. As written, this proposed statute makes any social media violation by an employee into misconduct. Accordingly, any employer discharge for a social media policy can now subject an employee to a misconduct disqualification. Hence, this provision is also likely to put state employers at risk of losing their FUTA tax exemption.
AB147 also mandates that employees with combined wage claims (also called interstate claims) who live outside of Wisconsin must register with the job center in their state. The problems with this proposed change are two-fold. First, the Department already requires claimants to do this registration. Second, this requirement ignores the fact that not all states and territories have job registration systems. Indeed, Minnesota, just next door, has no such requirement or system. As a result, Wisconsin is requiring claimants to do something that cannot actually be done in a state that lacks a job center like Wisconsin’s.
AB147 continues with still more nonsense. At present, the Department audits about 10% of all work searches. This proposal wants to increase the number of work searches being audited to 50%. As a result, it would either require the Department to quintuple its workforce or force current employees to do nothing but work search auditing.
Finally, in a pique over the PUA and MEUC benefits and supplemental PUC benefits that were made available during the pandemic, the legislature wants the Joint Committee on Finance to have a voice in whether similar funds and benefits become available in the state in the future. As evident here, the legislators simply fail to understand that Wisconsin has a partial wage formula that encourages people to work while claiming unemployment benefits. Indeed, raising the benefit levels and removing the current $500 cap would probably lead to more people working while collecting unemployment, not less. Apparently, basic economics is not needed for unemployment legislation.
Requires the Department to allow employers to report people who do not show up for interviews, who declines a job interview, who miss an interview, who miss work, or who fail to return to a job after being recalled. The Department, however, already encourages employers to report this information. See, e.g.,Refused Work, Work Available with Current Employer, and Report Unemployment Fraud. All of these employee actions would also lead to a loss of benefits, IF the person was claiming benefits at the time.
So, this portion of the bill changes nothing that it purports to do. Claimants who fail to attend a job interview for reasons that do not relate to illness or finding another job are likely to be found ineligible for benefits and perhaps even guilty of fraud/concealment. Indeed, this proposal actually makes claim-filing less onerous by allowing a person to have one such report as NOT counting against their eligibility (when right now, all such reports are investigated and ineligibility found if the claimant lacks the required legal justification).
Furthermore, this proposal ignores the fact that claimants are already doing four job searches a week in an economic climate where employers are desperate for finding employees to hire. Accordingly, employees may well find new jobs and skip interviews or offers to return to jobs after finding new jobs that pay more. And, as shown already, in 2022 and 2023, claim-filing is at record lows. In short, this proposal pretends that the labor supply is growing and that there are numerous unemployed people looking for jobs while claiming unemployment benefits, when the claim-filing data indicates the exact opposite.
Require the Department to provide various employer information in its fraud reports and job search information to claimants.
This proposal adds: (a) some mandatory employer-reporting information to future Department Fraud Reports about missed job interviews and the like to the Department, and (b) a requirement to provide claimants with vital work search information that they now have to search for on their own.
In 2022, DWD completed 22,012 work search audits. The audits resulted in 9,045 adverse decisions with benefits denied, including when claimants failed to conduct four valid work search actions. An additional 27,404 adverse determinations were issued for failure to answer the work search question or failure to provide required information on the weekly claim before the claim paid.
Nearly 28,000 claimants in 2022 (out of 263,248 initial claims, or one out of every nine claimants) lost out on benefits because they did not supply required job search information in the first place, even before an audit took place. When one out of every nine people fail to finish something, that reporting requirement is, by definition, NOT easy and understandable.
This bill appears to be a Department-sponsored initiative and mandates things already being done by the Department or which the Department would like to do.
Identity verification — mandates identity verification for claimants (currently based on Wisconsin-issued IDs).
Expanded call center hours whenever there is a declared state of emergency or call volume has increased by 300% from the previous level of a year ago. At present, numerous claimants are reporting to me that 15-20 phone calls a day are all leading to busy signals, so perhaps an increase of 50% should lead to expanded call center hours.
Mandatory comparison with death records, new hire reporting, and prison records on a weekly basis. The Department already does this cross-match, though delayed by weeks or months.
What should be required is that DWD be mandated to do cross-matches with the quarterly unemployment tax reports the Department receives from employers in April, July, October, and January of each year for all weekly certifications filed during the previous four months (the Department’s current practice is to do a cross match on employer’s quarterly unemployment tax reports from nine to twelve months after the weekly certifications have been filed).
The Department should also be mandated to do cross-matches with employer’s payroll tax withholding reports submitted to the Department of Revenue on a monthly basis. In this way, any over-payments of unemployment benefits would be minimized to a month or less. Moreover, employers would no longer need to submit UCB-23 Wage Verification/Eligibility reports, as the Department would already have this information from the wage/tax withholding reports from the Department of Revenue.
Unilateral transfer of administrative law judges from other state agencies to DWD for handling unemployment hearings.
Rather than hiring and training attorneys properly, the Department wants to force attorneys who handle environmental regulation cases, discrimination matters, or workers compensation cases into hearing and deciding unemployment cases. What the Department should be focused on is adequate training and hiring, not another kind of quick fix. As I have pointed out elsewhere, the skyrocketing number of denials and over-payments is largely because of inadequate information available to claimants. So, getting claimants educated with concrete, specific advice in place of legalisms so as to avoid all the denials in the first place is what is needed here.
This proposal seeks to limit the number of weeks of unemployment benefits available according to the state unemployment rate. An unemployment rate of 3.5% or less would mean only 14 possible weeks of unemployment benefits would be available. Only when the unemployment rate was higher than 9% would the full 26 weeks of benefits be available.
This proposal fundamentally misunderstands how unemployment works and why it exists. Unemployment benefits are not something that workers earn. Rather, unemployment is an insurance benefit for maintaining consumer demand for which employers pay a premium, based on their experience rating. As explicitly stated in Wis. Stat. § 108.01 (emphasis supplied):
(1) Unemployment in Wisconsin is recognized as an urgent public problem, gravely affecting the health, morals and welfare of the people of this state. The burdens resulting from irregular employment and reduced annual earnings fall directly on the unemployed worker and his or her family. The decreased and irregular purchasing power of wage earners in turn vitally affects the livelihood of farmers, merchants and manufacturers, results in a decreased demand for their products, and thus tends partially to paralyze the economic life of the entire state. In good times and in bad times unemployment is a heavy social cost, directly affecting many thousands of wage earners.Each employing unit in Wisconsin should pay at least a part of this social cost, connected with its own irregular operations, by financing benefits for its own unemployed workers. Each employer’s contribution rate should vary in accordance with its own unemployment costs, as shown by experience under this chapter. Whether or not a given employing unit can provide steadier work and wages for its own employees, it can reasonably be required to build up a limited reserve for unemployment, out of which benefits shall be paid to its eligible unemployed workers, as a matter of right, based on their respective wages and lengths of service.
(2) The economic burdens resulting from unemployment should not only be shared more fairly, but should also be decreased and prevented as far as possible. A sound system of unemployment reserves, contributions and benefits should induce and reward steady operations by each employer, since the employer is in a better position than any other agency to share in and to reduce the social costs of its own irregular employment. Employers and employees throughout the state should cooperate, in advisory committees under government supervision, to promote and encourage the steadiest possible employment. A more adequate system of free public employment offices should be provided, at the expense of employers, to place workers more efficiently and to shorten the periods between jobs. Education and retraining of workers during their unemployment should be encouraged. Governmental construction providing emergency relief through work and wages should be stimulated.
(3) A gradual and constructive solution of the unemployment problem along these lines has become an imperative public need.
In other words, unemployment is a lot like automobile insurance. The more accidents you have (i.e., more layoffs and claims), the higher your insurance premium. And, just because a driver may have been “accident-free” for some time does not mean the driver should then cut coverage — especially just before the driver hits a busload of school children on the highway. This proposal is essentially pretending that Wisconsin will forever in the future be “accident-free.”
Business interests often overlook the vital stabilizing effect UI has on local economies, even though this is also a foundational purpose of the program. UI is an automatic stabilizer: by temporarily replacing some of the lost wages of unemployed workers, it automatically fuels overall economic demand when private spending declines during a national recession or local downturn. Cutting benefit duration reduces this stabilizing function, making layoffs more harmful to the economy.
Jake has been providing excellent coverage about the current economic and jobs data and how wage growth here was been more of an illusion than a reality.
What this indicates to me is that things are actually still very healthy in Wisconsin’s jobs market, but we still can’t find enough people at publicly facing service jobs to have a typical round of Summer hiring. Some of this may be wage-related, but I also think it is due to a demographic issue that the state has been dealing with for several years.
“In the past, we have discussed how Wisconsin’s aging population, low birth rate, and lackluster net migration figures have led to a reduction in the working-age population (here defined as individuals between the ages of 18 and 64). The Wisconsin Department of Administration projects the state’s working-age population will remain roughly the same size – if not decline slightly – until at least 2040.
“Indeed, from 2010 to 2019, Wisconsin’s working-age population declined by 1.0%. While the state’s overall adult population (ages 18 and older) is growing year-over-year, there is a much more rapid increase in those over the age of 65. In other words, Wisconsin’s residents are reaching a typical retirement age at a much faster rate than they are entering the workforce, shrinking the overall labor pool. On top of that, the pandemic caused more people to retire at earlier ages, and it is still unclear to what extent those retirees can be lured back into the workforce.”
All of this information indicates we have a state that seems to be maxed out on workers, and needs to find ways to attract more people to come here.
But even with another 54,500 jobs added in the state since May 2021, Wisconsin’s 1.9% rate of job growth is less than half the 4.5% rate of growth the nation has seen in that time period. And with 2.9% unemployment in a state that has labor participation more than 4% above the national average, it makes me wonder just how many more jobs can be added in the state today.
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It also tells us that the longer-range challenge for the state is to get people to locate to a cold-weather place that traditionally hasn’t paid as much as nearby big markets like Chicago or the Twin Cities.
And, in May 2022, Jake was reporting about “gold-standard” job numbers in Wisconsin that:
So what the QCEW tells me is that our state still has jobs left to gain, but our 2.8% unemployment and relatively low population growth might mean there isn’t much more to gain back. The monthly jobs reports have been positive so far in 2022 (up by nearly 30,000), but let’s see if that growth in wages can start matching the US rate, and can keep workers ahead of the rising prices that we have seen in this year.
First, the number of jobs that exist now is still less than what existed before the COVID-19 pandemic.
And yet, every single one of these states still had fewer jobs in June than before the pandemic. EPI’s Economic Indicators page shows that the United States is still down 524,000 jobs from its pre-pandemic peak. If we account for population growth over the last 2.5 years, the country has 3 million fewer jobs than we would expect if pre-pandemic trends had continued.
Second, labor force participation — the number of people working or looking for work, called an LFPR — is also down from what existed prior to the pandemic.
In Minnesota, the LFPR in February of 2020 was 70.8%. This was considerably above the national average of 63.4%, reflecting Minnesota’s strong employment numbers. By June of 2022, however, Minnesota’s LFPR had dropped 2.3 percentage points to 68.5%. That is larger than the national drop of 1.2 percentage points, from 63.4% to 62.2%. This means that while there is a historically low share of Minnesotans who say they’re looking for work and can’t find it, there is also a substantial share of adults in Minnesota who, since the pandemic hit, are no longer working and not looking for work. In fact, Minnesota’s decline in labor force participation from February 2020 to June 2022 is the 9th largest in the country.
Third, inflation is disconnected from these employment and unemployment numbers.
EPI’s Josh Bivens has explained in detail how current high levels of inflation are the result of global supply-chain problems caused by the pandemic and corporations exploiting the situation to extract larger profits than normal. If low unemployment was a primary driver of inflation, we would see an increase in wages above the rate of inflation, but the opposite is happening. Wages, far from contributing to price increases, are lagging behind price increases, and wage growth is decelerating significantly.
Fourth, the sectors of strong job growth are areas that are attracting new employees who previously were not looking for work at all.
In June, 73.1% of people who were newly employed were not counted as part of the labor force the month before. That is, according to the data, nearly three-quarters of the people who got a job in June weren’t looking for a job in May. This strongly suggests that there are many people interested in re-entering the labor force if there are good jobs available to them, jobs that allow them to balance work and care responsibilities, and jobs that adequately protect their health and safety.
Fifth, job growth, then, is highly dependent on policies that make what a few employers are doing to make work more flexible and to offer higher pay into a baseline for what all employers offer their employees. These policies include:
expanded social and economic supports for child care and elder care
criminal justice reforms that prevent arrest and conviction records from being used to deny employment opportunities
economic support for affordable housing where jobs are located
Indeed, racial and ethnic disparities in job growth continue to exist at staggering levels.
Unemployment for Black workers continues to run nearly twice as high as that for white workers, and Hispanic workers have an unemployment rate 30% higher than white workers. These disparities persist—in both employment and wages—even when controlling for education and qualifications.
Sixth, because there is no actual connection right now between wages and inflation, higher wages in general are still urgently needed.
Last, but by no means least, the minimum wage needs to be increased. Many states and cities have increased their minimum wages in recent years, with no discernible impact on the price of gas and oil, food, cars, or semiconductors. A federal $15 minimum wage would lift wages for tens of millions of low-wage workers across the country. In terms of purchasing power, the federal minimum wage is at its lowest level since 1956.
Several folks have forwarded to me different articles that describe the current unemployment situation.
An article in Dissent establishes that the current attack on pandemic unemployment programs is mostly just another kind of attack on working folk.
Across the country, workers have used the health and safety concerns posed by the pandemic and the enhanced unemployment insurance provided by the CARES Act to renegotiate the basic social contract that governs the American workplace. As social-distancing restrictions end and employers look to meet customer demand, pandemic unemployment benefits—which increase the amount in weekly income and the length of time that workers can claim it—have empowered working people across the economy.
Nationally, wages at the bottom of the labor market experienced a huge jump in April 2020 and continued to rise. Average hourly earnings in retail are up a dollar since May 2020, and over $1.50 since before the pandemic. In education, hourly earnings are up ninety cents since May 2020. As one indication of confidence in individual bargaining, workers are quitting at a historically high rate. Four million workers, nearly 3 percent of the labor force, voluntarily left employment in April. Workers who quit are not eligible for unemployment insurance: they are changing jobs to look for better pay and treatment.
The Biden administration has professed a commitment to creating a bargaining environment more favorable to workers. “It is the policy of my Administration to encourage worker organizing and collective bargaining,” the president wrote in his April Executive Order on Worker Organizing and Empowerment, which established a cabinet-level task force to promote those goals. The purpose of the order is to determine how the administration can begin to reverse the decline in union membership, to which the White House attributes “serious societal and economic problems in our country,” including “widespread and deep economic inequality, stagnant real wages, and the shrinking of America’s middle class.”
These goals are running aground in the face of a now ubiquitous talking point: according to the nation’s business press and cable news channels, a “labor shortage” created by workers’ increased bargaining power is holding back growth of the post-pandemic economy.
In Wisconsin, wages have not actually increased all that much during the pandemic, especially in sectors where pandemic job losses were greatest — hospitality and leisure — where a huge jobs hole has been created: “More than half of the private sector jobs lost in Wisconsin in 2020 were in the Leisure and Hospitality Sector, over 60,000 in all, which left us with nearly 22% fewer Leisure and Hospitality jobs than there were in December 2019. “
On the other hand, jake reports, “one sizable industry was nearly back to even in Wisconsin by the end of the year, and both managerial and manufacturing jobs lost a lower rate of jobs than the statewide level of 4.8%.”
It’s pretty obvious what is happening here. Many people who lost their jobs as COVID broke out had to settle for other work, and I have to think that they and a lot of others have questioned the point of settling for menial jobs that don’t pay much, and put them in contact with large amounts of people that may not be vaccinated against a virus that has killed nearly 600,000 Americans.
So when they get a chance to move on for something that is safer and/or pays better and treats them better, they’re taking it. It just hurts the fee-fees of greedy, mediocre business owners that people are taking what they have (don’t) have to offer.
I also wanted to give you a look at how Wisconsin shaped up compared to the rest of the US in personal income. This number went up across the board in the US despite the COVID recession because of thousands of dollars in stimulus payments, enhanced unemployment benefits, and PPP bailouts. But Wisconsin didn’t have nearly the boost that most places had, with our income growth of 4.4% putting us down at 46th in the country.
We trailed in all three areas, particularly in those transfer receipts, which may reflect that we had fewer people collecting those higher unemployment benefits, stimulus checks and PPP funds. But we also trailed in earnings (Wis down 0.3%, US was up 0.3%), and lagging in wage and earnings growth has continued to be a worrying trend in the last decade in Wisconsin.
So, the problem in Wisconsin is not too much support for unemployment but too little. What worries current legislative leaders, apparently, is that even this minimal support is still too much. In These Times features the situation in Wisconsin.
[Gov. Evers says he disagrees with these actions but has not promised to veto the rollback of these pandemic unemployment programs. The evidence of these programs, however, . . . ]
“Unemployment rates in Wisconsin don’t support the overdrawn and quite dramatic, self serving conclusion that there are a bunch of people sitting on the sidelines who are ready to go to go to work in otherwise low wage, no benefit, insecure, crappy jobs if $300 a week, supplemental unemployment benefits were eliminated,” said Peter Rickman, president of MASH. At the same time, Rickman sees the current economic landscape as an opportunity for workers. “The way the labor market is constructed right now is such that the balance of power instead of being wholly and entirely in favor of the boss class, has had a slight tipping towards the working class,” he said.
Senator Melissa Agard (D‑16th District) argues that cutting UI won’t put people back to work as much as it would harm struggling families. “It’s really unfortunate that my Republican colleagues in Wisconsin are continuing down the same path that they were on pre-pandemic: making it harder for people to be able to get ahead and take care of themselves and their families,” Agard told In These Times. “Folks are having a hard time finding people for jobs primarily because they’re not paying people a living wage, or respectable wage to do those jobs.”
One final point to keep in mind is that Wisconsin’s unemployment system has a partial wage formula (not offered in most states) that means unemployment and work are NOT mutually exclusive. Many unemployed folk can and do work part-time while still receiving unemployment benefits.
The UC Berkeley Labor Center has developed one such plan. This plan provides detailed recommendations that can be applied in other states to ensure quality jobs and which support workers under policies that reduce greenhouse gas emissions.
The Action Plan identifies specific complementary labor policies that can be incorporated into climate policies to generate family-supporting jobs and career pathways for disadvantaged workers. The plan hows how training investments can deliver the skills required to perform these high-quality jobs and broaden access for all workers. It also provides recommendations on the transition for workers in declining industries to comparable livelihoods.
There are a series of short briefs for specific industries:
Update (28 Jan. 2021): TMJ4 is perhaps the only media outlet in the state that actually describes what happened at the hearing over current problems with unemployment claims and how any computer updates are not a viable solution for those currently dealing with this mess.
I am scheduled to testify before the Senate Committee on Economic and Workforce Development this Wednesday, January 27th, at a public hearing starting at 10am, concerning Wisconsin unemployment.
Given the general lack of information about what is actually happening with the unemployment crisis, I have provided the committee a 199pp. PDF of the materials and a 3pp. letter describing those materials.
Some of the charts and tables in the informational packet include:
The year of 2007 should be considered a base year for how a healthy unemployment system in this state should function.
Notice that during the Great Recession first payments of benefits for the most part continued to be timely.
Except for Minnesota, Wisconsin has had fewer PUA claims that many other states and has paid far fewer PUA claims as a percentage than other states. New Jersey, like Wisconsin, has a COBOL mainframe for their unemployment claims. Yet, New Jersey’s handling of PUA claims shows incredible success compared to Wisconsin.
Update (27 Jan. 2021): My testimony and the testimony of others, including the Department, is available here. My testimony starts around 11am (an hour into the hearing), and runs 30-40 minutes. Here is a recap of my remarks about how disabled workers are being treated:
$1.1 billion is the amount available in the unemployment trust fund at the end of December 2020. $1.1 billion that is not helping anyone but just sitting in a bank account.
Unemployment in Wisconsin is recognized as an urgent public problem, gravely affecting the health, morals and welfare of the people of this state. The burdens resulting from irregular employment and reduced annual earnings fall directly on the unemployed worker and his or her family. The decreased and irregular purchasing power of wage earners in turn vitally affects the livelihood of farmers, merchants and manufacturers, results in a decreased demand for their products, and thus tends partially to paralyze the economic life of the entire state. In good times and in bad times unemployment is a heavy social cost, directly affecting many thousands of wage earners. Each employing unit in Wisconsin should pay at least a part of this social cost, connected with its own irregular operations, by financing benefits for its own unemployed workers. Each employer’s contribution rate should vary in accordance with its own unemployment costs, as shown by experience under this chapter.
So, money to pay rent and groceries, to dine out in restaurants, just to spend on consumer goods — WHEN there is a state-wide lack of consumer spending because of a worldwide pandemic — is not going out to the unemployed workers in this state who need it.
One group in particular has been hit hardest — the disabled.
Wisconsin is one of only two states that denies unemployment benefits to those who receive SSDI benefits. This eligibility ban was premised on the belief that only 50 workers would be affected by it.
That belief was not true. In any given year, there are 150,000+ SSDI working in Wisconsin (for 2019, see Table 27 at this link). To put that number in perspective, in the December 2020 jobs report for Wisconsin, there were 128,100 construction workers in this state, a ~22,000 short of the workers who receive SSDI benefits.
Wisconsin is allowing its employers to lay off these 150,000+ disabled workers and face no consequences for such layoffs. If unemployment was automobile insurance, then Wisconsin would exactly be saying that drivers could run over disabled people without any consequences to their auto insurance premiums. This is obscene.
So, a $1.1 billion unemployment trust fund has been built up on the backs of 150,000+ disabled workers in this state who by law cannot receive those unemployment benefits, against this explicit provision in Wis. Stat. § 108.01(1) (emphasis supplied):
Whether or not a given employing unit can provide steadier work and wages for its own employees, it can reasonably be required to build up a limited reserve for unemployment, out of which benefits shall be paid to its eligible unemployed workers, as a matter of right, based on their respective wages and lengths of service.
Not much to say about the reporting by the Verge on the disaster that is FoxConn in Wisconsin. The picture presented in this article is of vaporware: no actual product plans were ever in place for anything in Wisconsin and the company has struggled since to come up with something.
Still, I do wish I could have raced some of those golf carts around the empty warehouse. That sounded fun.
The sad news is that politics continues to divide on reality. Empty buildings, nothing being manufactured, and an utter failure to even hire a minimum of 520 jobs (when the factory should be employing at least a 1000 now if it was legit; and it was expected to have 2080 employees at the end of 2019 on that path to 13,000) still does not matter to those who supported this project.
Terry Gou’s response continues to promise the world to the politicians who play ball with the company. At least good con men realize when the jig is up.
A billion dollars in land and infrastructure spending has been wasted on some empty buildings.
Others have focused on the total number of claims being filed. What may be more useful is comparing this increase in claims to what occurred when there was no pandemic — aka last year — and how the claims data has varied over time.
So, what makes sense, then, is a ratio of new claims being filed for the equivalent week last year when there was no pandemic. This ratio would indicate both how these new claims compare to when there was no pandemic AND how the unemployment picture is changing over time.
Unfortunately, this picture is unsettling to say the least.
In week 11 of this year, claims in 2020 were equivalent to the same week of claims in 2019: 1.02 to be exact. Then the pandemic struck the next week, and unemployment claims skyrocketed to 13x what was filed in 2019. For the next two weeks, the number of claims continued to increase to around 20x what was filed in 2019.
Even when the number of new claims began declining, they continued at more than 10x the number of claims filed in 2019 for the next three weeks. Then, for another three weeks, initial claims continued to run at around 9x or 10x the number from 2019.
Only by week 21 did the number of initial claims come down to over 7x the number of 2019 claims. Since then, the number of initial claims has continued to hover around 6x the number of unemployment claims filed for the equivalent week in 2019. And, it seems that this trend will continue at least for the next several months.
So, in the best circumstances this pandemic has led to new unemployment claims continuing to be filed at 6x the rate of unemployment claims in 2019.
Note: This data is only for regular unemployment claims. Independent contractors and those with insufficient earnings to qualify for unemployment in the first place likely have never filed a claim for regular unemployment benefits in the first place and so are excluded from this data. In other words, the unemployment picture is being under-reported with this data.
At this rate, the question will soon be who in Wisconsin has NOT filed an unemployment claim, as the state’s workforce is only around 3 million in toto. I hate to say it, but these numbers are approaching Great Depression levels of joblessness. There is no indication — especially with Covid-19 cases on the rise — of any possible turn around with the economy any time soon. So, new unemployment claims will likely continue to be much higher than last year for months to come.
Note: In a robust economic recovery, we should expect the ratio of 2020 to 2019 claims to go smaller than 1.0. Pent up economic demand would lead companies to increase hiring to meet the accelerating demand for their product. Does anyone even pretend to talk about that kind of economic activity right now?
Second, all of us need to understand that this unemployment problem is not going away anytime soon. With so many initial claims now in the system, it will take months just for the folks currently with claims to find the same work they had before the pandemic. And, with new initial claims continuing to be filed at a record pace, the number of unemployed is now probably equal to the number of workers in this state who are outside the unemployment system. When winter arrives and many seasonal employees are laid off, the state’s economy will take another tremendous hit.
Accordingly, the economic stimulus that unemployment offers is currently an essential component of the economy and is keeping what economic activity that currently exists afloat. The loss of the $600 PUC benefit this week is going to have dire consequences, even in Wisconsin when too few have managed to receive any unemployment benefits at all. The end of 2020 when many if not all of the current CARES Act benefits expire could become a fiscal cliff for Wisconsin and the nation if nothing is done to extend these programs into 2021.
Third, this continued number of initial claims at roughly 6x the rate of last year indicates that the Department’s strategy of simply hiring more people to process these claims is unworkable. The Department’s July 13th news release about having 1884 staffers (1380 more than the 504 the Department had prior to the pandemic) is still wholly inadequate to handle the deluge of initial claims being filed.
Even with new initial claims now settled at 6x what was being filed before the pandemic, the Department’s increase in staff is only 3.75x what existed prior to the pandemic. To properly staff up for the number of initial claims currently being filed, the Department needs to have 3024 staffers on hand. And, that level of staffing would only work if initial claims remain at only 6x and do not rise any further from 2019 levels.
The Department cannot fix this unemployment problem in this state by hiring all of Wisconsin to process all of the unemployment claims. The Governor and the Department need to start talking now about some new policy choices to make the unemployment claim-filing process easier and more manageable. And, a jobs programs like the Civilian Conservation Corps are probably in order as well.
I know broadband access is a state-wide problem. Getting cheap and effective Internet access to folks in this state would do everyone a world of good, both in the short-term (jobs) and the long-term (more jobs). A British village can do it. Why not Wisconsin?
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.
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:
Accolades over the last few years about a glowing economy and booming Wall Street always seemed off, and recent economic news is putting these claims under the knife.
More than 2 years later, we are back below 26,000. That’s despite all of the corporate tax cuts and stock buybacks that have inflated earnings per share. And now we have slower job growth and GDP growth than we were seeing before the Tax Scam became law.
I think that reality had a lot to do with the market falling apart with today’s rate cut. The Fed’s message wasn’t “We will be OK and get by.” It was “THINGS ARE REALLY MESSED UP AND WE FEEL WE HAVE TO DO SOMETHING BIG!” And now, there isn’t much left that the Fed CAN do.
Wisconsin Unemployment 
