Loss of Federal Unemployment Stimulus Will Devastate Wisconsin Working Families, lead to over 65,000 additional jobs losses
For Immediate Release– July 24, 2020
Contacts: Robert Kraig (414) 322-5324, [email protected]
Kevin Kane (414) 550 8280, [email protected]
New Report: Loss of Federal Unemployment Stimulus Will Devastate Wisconsin Working Families, lead to over 65,000 additional jobs losses
Report finds every metropolitan area to see substantial job loss as families lose funds.
STATEWIDE: On a media webinar today Citizen Action of Wisconsin was joined by State Senator La Tonya Johnson to release a new report showing the economic consequences of a failure of Congress to extend the $600-per-week benefit for out-of-work and partially working Wisconsinites. Without a renewal by Congress and the President, the benefits will expire on Saturday in Wisconsin. Republicans in Washington remain gridlocked, and will not make a counter proposal to House Democrats (who passed an unemployment extension in May) until next week at the earliest.
A video recording of the news conference is available here.
The report breaks down the economic impact of cutting the $600-per-week federal funding stimulus for major Wisconsin metropolitan areas. Over 200,000 Wisconsin unemployed workers and underemployed workers participating in Work-Share programs will lose more than half of their family incomes. Taking this money out of the pockets of working families across Wisconsin will have a cascading impact on local economies, cutting demand for groceries, auto repairs, and other basic services, damaging already struggling businesses and forcing additional layoffs. It will also force many to go without enough food and other basics, and spark an unprecedented wave of evictions and foreclosures.
- For workers, the drop in the $600 enhanced UI stimulus weekly will result in an over 60% drop in weekly earnings for those out-of-work. (Figure 1)
- Statewide, Wisconsin could expect to see a loss of 65,635 jobs over the rest of the year by a drop in consumer demand from the ending of the $600-per-week federal support to out-of-work Wisconsinites. (Figure 2)
- At current levels of unemployment, $3.1 billion in federal funds will be taken out of the pockets of working people and local Wisconsin economies from August through December. An extension through the end of the year is included in the HEROES Act passed by the House of Representatives in May but stalled by the U.S, Senate and the President. (Figure 2)
- Because metropolitan areas often cover large regions, county level unemployment figures alone do not fully capture the impact. The 3 metropolitan areas most impacted are Greater Milwaukee (20,458 jobs at risk), Greater Madison (6,842 jobs at risk) and Greater Green Bay (3,238 jobs at risk).
- As covered in Figure 3, every county in Wisconsin would be impacted, hurting rural and urban Wisconsin alike as dollars are not spent consumer-to-business then business-to-business.
Figure 1: Percent of Income Reduction from Drop in UI Benefits
|Impact by Worker Characteristics||Weekly Benefit Currently||Weekly Benefit Without Stimulus||Reduction in Earnings|
|Full-time worker who normally earns $20/hour or more*||$970||$370||61% reduction in spending potential|
|Worker who normally earns $10/hour, 30 hours a week||$756||$156||79% reduction in spending potential|
|Worker on a “Work-Share” plan, hours reduced 50% to 20 per week, $20/hour||$1,185||$585||50% reduction in spending potential|
* – Unemployment insurance amount is based on the quarterly earnings, a combination of hours and hourly wage. Data gathered from Department of Workforce Development’s Weekly Benefit Rate Calculator. UI weekly benefits are capped in Wisconsin at $370 per week at most.
Figure 2: Statewide and Metropolitan Economic Impact of Not Extending the $600/Week Unemployment Stimulus Until the End of 2020
|Metropolitan Statistical Area (MSA)||Jobs at Risk||Federal $ Taken from Wisconsin Working Families|
|STATEWIDE||65,635 jobs||$3.1 billion not coming to families|
|Milwaukee-Waukesha, WI MSA (covering Milwaukee, Waukesha, Washington & Ozaukee counties)||20,458||$975.1 million|
|Madison, WI MSA (covering Dane, Iowa, Columbia & Green counties)||6,842||$326 million|
|Green Bay MSA (covering Brown, Oconto & Kewaunee counties)||3,238||$154.3 million|
|Appleton, WI MSA (covering Outagamie & Calumet counties)||2,344||$111.7 million|
|Racine, WI MSA||2,204||$105 million|
|Janesville-Beloit, WI MSA||1,873||$87.2 million|
|Wausau-Weston, WI MSA||1,490||$71 million|
|Oshkosh-Neenah, WI MSA||1,644||$78.3 million|
|Eau Claire, WI MSA (covering Eau Claire & Chippewa counties)||1,583||$75.4 million|
|La Crosse, WI-MN MSA||1,160||$55.2 million|
|Sheboygan, WI MSA||1,030||$49 million|
|Fond du Lac, WI MSA||874||$41.6 million|
* – Source: US Census designation of Metropolitan Statistical Areas
** – Methodology: Using the state-level calculation of job loss from the Economic Policy Institute, we estimate the local impact through adjusting for the proportion of unemployed Wisconsin workers eligible for the $600-per-week benefit by multi-county Metropolitan Statistical Area (MSA). MSA’s are preferred as they better capture the flow of money between adjacent communities and local economies.
*** – Based on DWD UI Week 26 estimate of weekly claim recipients by county, grouped by MSA, multiplied the number of weeks remaining in 2020 and by $600 per week. Figures may be low, as they do not count residents waiting for unemployment determinations and UI funds.
Figure 3:Number of Residents Unemployed by County, as of DWD Week 26, and Estimate of Jobs at Risk Per County from End of $600 Unemployment Stimulus.
|County||Estimated Job Loss from Conclusion of $600/week*||Weekly unemployment claims as of DWD UI Week 26**|
|Adams||109 jobs at risk||375 people unemployed|
|Fond du Lac||874||3,020|
|Not allocated to a specific county***||5,419||18,718|
* – Methodology: Using the state-level calculation of job loss from the Economic Policy Institute, we estimate the local impact through adjusting for the proportion of unemployed Wisconsin workers eligible for the $600-per-week benefit by county. While county level spill-overs no doubt occur (money is not only spent in the county one lives in) we assume spillovers occur in both directions between counties.
** – Source: Wisconsin Department of Workforce Development (DWD) Wisconsin Unemployment Insurance Initial and Weekly Claims Filed, UI Week 26
*** – DWD statistics do not account for the county of origin for all UI recipients.
Figure 4: Wisconsin UI Weekly Benefit Rate Compared to Other States, National Average
Data source: CNBC story, 7.17.2020, link
“It is absolutely stunning that in the middle of a pandemic-induced depression, conservatives in Washington are forcing the cut-off of the unemployment payments that keep millions of working families afloat,” said Robert Kraig, Executive Director of Citizen Action of Wisconsin. “The important data in this release document the needless economic pain that will be inflicted on Wisconsin working families in every corner of the state, and the additional working families. The data also document the cascading impact this cut-off of support will have on tens of thousands of additional working families who will also lose their jobs as a consequence. With enhanced unemployment payments ending next week in Wisconsin, and Republican in Washington in gridlock, the State Legislature must come back into immediate emergency session. This is a time for leadership, and it is time for conservative politicians at the federal and state level to start doing their jobs,” Kraig concluded.
“For many families the extra 600 federal unemployment benefits means the difference between financial security during a time when they are struggling due to no fault of their own, and the risk of losing their home”, said State Senator La Tonya Johnson. “We need our leaders at both the state and federal level to take immediate steps to support Wisconsin families, including removing red tape that makes it difficult to successfully navigate the UI system and maintaining the $600 federal lifeline that families-and our economy- depends on.”
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