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, robert.kraig@citizenactionwi.org
Kevin Kane (414) 550 8280, kevin.kane@citizenactionwi.org

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.

Key Findings

  • 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
Ashland 197 681
Barron 337 1,164
Bayfield 121 419
Brown 2,821 9,744
Buffalo 75 260
Burnett 99 341
Calumet 558 1,929
Chippewa 550 1,901
Clark 221 762
Columbia 711 2,456
Crawford 131 453
Dane 5,604 19,354
Dodge 778 2,687
Door 259 894
Douglas 276 954
Dunn 345 1,190
Eau Claire 1,033 3,567
Florence 12 43
Fond du Lac 874 3,020
Forest 140 485
Grant 359 1,240
Green 257 889
Green Lake 152 524
Iowa 270 931
Iron 53 184
Jackson 285 984
Jefferson 710 2,453
Juneau 301 1,039
Kenosha 1,498 5,174
Kewaunee 134 462
La Crosse 1,160 4,007
Lafayette 107 368
Langlade 161 557
Lincoln 269 930
Manitowoc 899 3,106
Marathon 1,490 5,146
Marinette 362 1,250
Marquette 141 488
Menominee 87 301
Milwaukee 14,475 49,994
Monroe 336 1,161
Oconto 283 979
Oneida 309 1,066
Outagamie 1,786 6,167
Ozaukee 829 2,862
Pepin 40 137
Pierce 236 816
Polk 305 1,055
Portage 708 2,445
Price 109 377
Racine 2,204 7,613
Richland 126 435
Rock 1,873 6,468
Rusk 95 328
Sauk 890 3,075
Sawyer 150 519
Shawano 362 1,250
Sheboygan 1,030 3,556
St. Croix 576 1,989
Taylor 113 391
Trempealeau 272 940
Not allocated to a specific county*** 5,419 18,718
Vernon 197 681
Vilas 133 458
Walworth 774 2,675
Washburn 147 506
Washington 1,296 4,477
Waukesha 3,859 13,328
Waupaca 392 1,355
Waushara 194 670
Winnebago 1,644 5,677
Wood 526 1,817

* – 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.”

Web Link to News Release

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