The CapTimes and Madison.com just published my letter to the editor about a recent AP report on the solvency of the state’s UI fund.
Dear Editor: Recent concerns over the solvency of the Unemployment Insurance fund are misplaced.
As stated in a recent article, “The state could also further cut down on benefit payments to address the fund’s solvency,” and the state has been doing just that. Benefit payments in Wisconsin have plummeted to record lows. In early 2013, the Department of Workforce Development projected UI benefits to be $797 million in 2014 and $696 million in 2015. The actual benefit payments in 2014 were $732,327,104 and only $605,481,027 in 2015, $91 million less than expected.
Why have benefit payments plunged from what was expected? First, the department has set up a series of obstacles for folks to overcome when filing their claims, including poor phone support, mandatory internet registration, cumbersome job search busy work, and an increasingly complex filing process. Second, until the recent appeals court decision in Operton v. LIRC, substantial fault allowed DWD to disqualify claimants for inadvertent mistakes they make on the job. Finally, DWD has been charging claimants with unemployment fraud for making mistakes when trying to follow the increasingly complex process DWD has set up.
Recent DWD statistics showcase how unemployment fraud is becoming a major operation within DWD. In 2014, unemployment fraud charges jumped 44 percent from the previous year even as benefit payments markedly declined. For 2015, collection for unemployment fraud was up nearly 81 percent from 2013 collection efforts.
Since it is now so oppressive and dangerous to collect unemployment benefits, the risk of the fund going insolvent is minimal. But this concern for fund solvency ignores the whole point of unemployment benefits: to help those in need (and the state as a whole) when folks lose jobs through no fault of their own. In place of employers paying their taxes, the state has essentially achieved solvency on the backs of the unemployed.