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Pandemic Unemployment Benefits Are Gone, But Wisconsin's Workforce Problems Remain
It's time for Wisconsin's leaders to get real about addressing the many long-term challenges the state faces.
For much of the spring and summer, we heard a common refrain from Wisconsin Republicans: It was time to end the state’s participation in enhanced federal unemployment benefits installed to endure the pandemic, and get people “back to work.”
It was the latest installment of the right’s typically disingenuous narrative on anything regarding assistance provided through the social safety net. This year found them endlessly claiming that these emergency benefits designed to aid people who had lost jobs during the pandemic would “disincentivize” people from looking for a new job, and how this emergency benefit was “(paying) people a bonus not to work.”
As the vaccine rollout powered a return to relative normalcy for a few short months earlier in the year, it was a case they made repeatedly. In May, Republicans introduced legislation to eliminate the $300-per-week pandemic unemployment benefit, soon passed the bill, and in late July, tried to override Gov. Evers’ veto of said bill, unsuccessfully.
Their message did, ultimately, land. More than two-thirds of Wisconsin voters said the extra $300 per week was “keeping people from returning to work,” according to the early August edition of the Marquette University Law School Poll.
But now the real test is here. Those enhanced unemployment benefits expired on Labor Day, and the Biden administration has shown little interest in advancing an extension. About 7.5 million people are losing their benefits entirely, and another three million are losing their weekly $300 supplement, reports the New York Times.
While those pandemic unemployment benefits are ending now, the problems plaguing Wisconsin's job market and overall economic picture are still here. And so is the pandemic.
Data has not supported Republicans' repeated assertions that these benefits were preventing gains in the job market, or "disincentivizing" work.
The Wall Street Journal reports that states that cut unemployment benefits early -- which half of U.S. states did -- saw limited impact on job growth. States ending benefits early saw job growth of 1.33%, while in states where benefits remained, that number was 1.37%, the report said.
Another study, from economists and researchers at top universities like Harvard and Columbia, showed that these unemployment benefits were not the driving force in hiring challenges, and further showed that the economies from the states ending benefits saw “a reduction of nearly $2 billion in consumer spending” over the summer, so this hit the larger economy, too.
Another study, from those hardcore lefties over at JPMorgan Chase & Co., said Republican-run states ending unemployment insurance (UI) early is “tied to politics, not economics” and even showed Wisconsin with rather low unemployment and declining hourly wages -- hardly a sign businesses were going above and beyond to meet hiring challenges.
The problems facing Wisconsin’s workforce were present before the pandemic, and they are still here now with these benefits disappearing. The convenient scapegoat for Republicans and their lobbyist and talk radio allies is now gone, but Wisconsin still faces significant labor shortages and workforce challenges. What is the right’s excuse going to be now?
For about half of my last decade in journalism, I worked in business news reporting. In that universe, you hear constantly from business owners and C-suite leaders about the “skills gap” or “jobs gap” or “workforce gap” or whatever label is being assigned to mask the host of problems Wisconsin’s business community has been unable or unwilling to solve. All of which, conveniently, always seem to be the fault of the worker.
But a big part of Wisconsin’s workforce challenges have to do with the changing calculus of the state. Wisconsin has an aging population, and isn’t keeping enough young people around to fill the jobs that baby boomers are retiring from. In 2020, deaths exceeded births in Wisconsin for the first time ever. The state’s labor force participation rate has been on a fairly steady decline since the mid-1990s. Those long-term trends were put into focus by newly-released 2020 census numbers that showed that, outside of Dane County, Wisconsin isn’t really growing all that quickly. About one-third of the entire state’s population growth from the last decade came in Dane County alone, and the state’s overall growth was middling at best, at an overall rate of 3.6%.
The city of Milwaukee’s population shrunk slightly, and growth in the surrounding suburban WOW counties slowed to just 4%, down from 8% in the 2000s and double-digits before then. The state has not come close to sufficiently investing in its largest city, often going out of its way to do real harm to Milwaukee, and leadership in the city and region did itself no great favors in fostering growth, often holding the line instead of reversing troubling trends.
Interestingly, one of the only real drivers of population increases in Wisconsin has been the growth of Hispanic and Asian communities, indicating that immigration has been a significant force for good in Wisconsin. In Milwaukee, Hispanic, Asian and those identifying as two or more races increased by the tens of thousands even though the city’s overall population declined.
Overall, though, this meager growth across the state of Wisconsin has tightened the labor market. At the time when Republicans railed against the added benefits, the state’s unemployment rate was under 4%. Considering the challenges the pandemic has brought to the economy over the past 18 months, that’s a pretty low number, only about half a percent higher than where it was when the pandemic hit.
If businesses are having problems finding people to hire, it’s not because a fairly small number of people were receiving extra unemployment benefits. Unemployment claims were back to pre-pandemic levels before the added benefits ended. It’s because there aren’t enough people here to fill the jobs that are available, we’re not paying people enough to do those jobs, and we’re not creating an environment attractive to the next generation of workers.
The persistent, long-term problems in the Wisconsin workforce are still largely going unaddressed by an incredibly powerful state legislature that’s been under Republican control for more than a decade, and is overly beholden to business lobby Wisconsin Manufacturers and Commerce, which keeps driving backwards policy that’s harming the long-term health of the state.
Gov. Evers just put $100 million toward workforce development grants, which is smart and necessary, but funds like that from the federal American Recovery Plan Act are not long-term solutions.
Wisconsin is a fairly low-growth state, with fairly low wages — we still have just a $7.25-per-hour minimum wage! It’s a state that’s been overly tied to a declining manufacturing industry, and has not adequately focused on the kinds of higher-tech, higher-wage jobs that have driven growing state economies (Kathleen Gallagher put this eloquently in a terrific column about this issue at the Journal Sentinel). We’re not encouraging enough immigration. We wrongly reversed course on funding public education during the Walker Era. Granting massive tax breaks to manufacturing companies has not reversed larger trends. The Foxconn investment was an all-time flop. We have uniquely poor transit options, particularly in our largest city, which has been pushed in the wrong direction on public transportation for decades. And these are the state’s crises that are stacked upon national crises of rising costs of necessities like health care and housing, a child care crisis that has exploded during the pandemic, and persistent systemic racism that has been uniquely damaging in this, one of the most unequal states in the union.
We need to face reality if we are ever going to actually address any of these cascading crises. Otherwise, they will continue to plague our state for decades to come.
Perhaps then, our next generation won’t be beholden to whatever flavor-of-the-month talking point the right drums up for a short-term political win while the long-term trajectory of the state continues to be deeply troubling. Maybe then we can actually get something meaningful done, for a change.
The debate over the enhanced benefits is now over. It’s time to get real. We need to make some major — and yes, perhaps politically difficult — changes if we have any hope of the 2020s being better than the 2010s in Wisconsin.
Dan Shafer is a journalist from Milwaukee who writes and publishes the award-winning column, The Recombobulation Area. He previously worked at Seattle Magazine, Seattle Business Magazine, the Milwaukee Business Journal, Milwaukee Magazine, and BizTimes Milwaukee. He’s also written for The Daily Beast, WisPolitics, and Milwaukee Record. He’s on Twitter at @DanRShafer.
Follow Dan Shafer on Twitter at @DanRShafer.