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Wisconsin needs to fulfill its promise to displaced workers

When people’s lives and livelihoods are on the line, pointing fingers needs to take a back seat to helping those hanging by a thread.

Decades of bipartisan neglect has culminated in nearly 390,000 Wisconsin residents having no safety net after being displaced due to COVID-19 workplace shutdowns. These men and women have been betrayed by ineffective administrations and state legislators focused on cutting corners to be able to hand out tax breaks to special interest groups rather than looking out for Wisconsin’s workers.

The 390,000 displaced workers include people whose workplaces were ordered to close by state and local governments under safer at home restrictions as well as those whose employers have been forced to reduce hours due to economic changes brought on by the pandemic. These are not freeloaders attempting to milk the system. They are men and women who are struggling and unsure of how they will pay their rent or put food on their family’s table.

The state’s unemployment compensation program is the primary safety net for workers who have lost their jobs through no fault of their own. It provides claimants from $54 up to $370 per week depending on their previous earnings. It is also the mechanism by which additional federal assistance under the CARES Act is being distributed to displaced workers.

The problems facing Wisconsin’s unemployment system are based in part on the unprecedented volume of claims during a short period of time and the antiquated system in place.

Core parts of the state’s claims processing system date from the 1970s. While audits of the system over the past two decades have routinely called for the state to overhaul it, the legislature and governors of both parties have ignored the system’s flaws. Now, it has become yet another political hot potato being tossed between the legislature and Gov. Tony Evers’ administration.

The shear volume of claims would be enough to swamp even a well-functioning system. Wisconsin Department of Workforce Development (DWD) officials are projecting a 27% unemployment rate in the state as a result of the pandemic. By comparison, the state topped out at about 10% unemployment during January 2010 at the height of the “Great Recession.” A year ago, Wisconsin celebrated its lowest unemployment rate on record at 2.8%. The state was on pace to beat the record this year with the February 2020 unemployment rate at 3.5%. Economists consider anything under 5% to be full employment.

Efforts are underway to clear up the backlog of 390,000 claims that have gone unprocessed by the system. The DWD has hired hundreds of additional personnel to address the issues, but the director testified at a legislative hearing this week that it could take until October for the backlog to be resolved. The delay is unacceptable.

No amount of legislative grandstanding or finger-pointing hearings will make the process go faster. The Wisconsin legislature has routinely kicked the can down the road when it comes to making necessary expenditures, instead choosing to champion tax cuts over investment in the future.

Wisconsin needs to move forward in ensuring that workers displaced due to the ongoing pandemic do not fall through the safety net.