Benefits Could Drop Dramatically in 2014 if Conservative Lawmakers Prevail

For some Wisconsinites there is a silver lining in the state’s increased unemployment rate over the last several months. Now that the rate has been at 7% or higher for three straight months, jobless workers in Wisconsin may qualify for a longer period of federally-funded unemployment benefits, known as Emergency Unemployment Compensation (EUC).

Beginning on May 12, the maximum duration of state and federal unemployment benefits for long-term jobless workers increases to 63 weeks, compared to the current limit of 54 weeks. The maximum length of those benefits has been fluctuating in Wisconsin as our unemployment rate has been swinging above and below the 7% threshold. (See the WI Budget Project’s blog post in January, when the maximum dropped to 54 weeks.)The limit might be considerably lower in 2014, even if the economy doesn’t improve very much, because the federal EUC program is currently slated to end next January, and Republicans in the Wisconsin Assembly have proposed legislation to significantly contract the duration of benefits financed from the employer taxes that go into the unemployment insurance (UI) trust fund. Congress extended the EUC program this year as part of the deal that avoided the fiscal cliff, but next year it’s more vulnerable because the program’s Congressional supporters won’t have as much leverage. (The size of EUC checks recently declined by 10.7% in Wisconsin because of the sequester.)

The maximum period of state UI benefits is currently 26 weeks in Wisconsin (and in the vast majority of states), and it has been capped at that level for as long as I can remember.  As my colleague Tamarine Cornelius explains in a recent WI Budget Project Blog post, the proposal that some Assembly Republicans are backing would set the limit at 12 to 26 weeks, depending on the unemployment rate at the time. When that rate is in the 7.0% to 7.4% range, as it is now, the maximum period of benefits would be just 22 weeks.

Read more about the May 12 increase in the federal-financed benefits in this May 1 State Journal article by Jeff Glaze and in this update from the Dept. of Workforce Development.

Jon Peacock