Congress is deciding whether to renew three additional months of unemployment benefits. The country extended coverage during the depths of the recession, but this latest extension ended with December. On Tuesday, the Senate voted to advance a plan, although some Republicans want concessions.
The estimated cost of the extension is $6.4 billion dollars. Since the start of the Great Recession, millions of federal unemployment benefits have already flowed to laid-off Wisconsin workers.
Wisconsin provides up to 26 weeks of unemployment benefits.
During the economic downturn, the federal government added 73 more weeks, through extensions. They’ve helped thousands of laid-off workers here stay afloat during the Great Recession, according to Jon Peacock. He’s director of the Wisconsin Budget Project. It analyzes state budget and tax issues.
“It’s pumped hundreds of millions of dollars into the Wisconsin economy. In fact, as recently as 2010 the federal unemployment benefits meant $1.3 billion for Wisconsin,” Peacock says.
Peacock says that while 2013 numbers aren’t in yet, he expects the total to be around $400 million. He attributes the drop, to fewer people needing jobless benefits. Yet, when the latest extension ended on December 31st, about 24,000 Wisconsin residents were affected.
“There’s still three times as many unemployed workers as there are job openings. In addition, the percentage of workers who’ve been looking for jobs for six months or more is unusually high,” Peacock says.
While Wisconsin awaits a decision from Congress about another extension, the health of the state fund is improving. It collects taxes from employers, and then provides up to 26 weeks of benefits to workers who lose their jobs. Scott Manley works for Wisconsin’s Unemployment Insurance Fund Advisory Council.
“The fund is actually gaining positive financial position right now. Although the fund is currently overdrawn, and has been ever since early 2008 because of the Great Recession. We’ve been building the balance of the fund back up, and it’s expected to go positive in this year in 2014,” Manley says.
Like a number of other states, Wisconsin depleted its unemployment fund during the recession and had to borrow money from the federal government. Manley says the state will also repay the loan this year. He says before the Great Recession, Wisconsin maintained a viable fund.
“The last time that it had gone negative was probably right around 1981 and had stayed in the negative until I think it was about 1985. And we had been positive in the fund every since then because the amount of benefits that were being paid out were typically pretty close in line to the amount of taxes that were collected to pay for those benefits,” Manley says.
Manley says the rebounding fund is due to fewer people seeking unemployment and businesses paying in at a higher rate.