Republican lawmakers on Tuesday introduced a bill that would end a $300 per week federal unemployment boost in Wisconsin, which several business groups say is creating a disincentive to work and exacerbates ongoing workforce shortage challenges.
The bill, which Assembly Speaker Robin Vos, R-Rochester, and Sen. Howard Marklein, R-Spring Green, said could be in committee next week and taken up by the Legislature as early as June, would end Wisconsin’s participation in four federal programs aimed at assisting individuals who are unemployed due to the COVID-19 pandemic. Supporters of those provisions say they provide much-needed assistance to those who are unable to find work or are reluctant to return to the workforce amid the ongoing pandemic.
“There probably was a time when it made some sense to pay the supplemental benefits,” Marklein told reporters Tuesday. “To me, that time has lapsed and the government needs to quit competing with our local employers. We need a reset here.”
Democratic Gov. Tony Evers, who could veto the bill if it reaches his desk, has not formally weighed in on the call by some Republicans and business organizations to strike federal unemployment benefits in Wisconsin, as some other states, including Iowa, have done.
“If Republicans are interested in putting this pandemic behind us, they’ll stop playing politics with our economic recovery and pass the governor’s Badger Bounceback agenda so we can invest in making health care more affordable, supporting our kids and our public schools, and building infrastructure and creating jobs across our state,” Evers spokesperson Britt Cudaback said in an email.
The GOP-authored bill would end the state’s participation in the Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation, Federal Pandemic Unemployment Compensation and Mixed Earner Unemployment Compensation programs. Currently, enhanced federal benefits are slated to run through Sept. 6.
In addition, the Legislature’s GOP-led rules committee plans to vote Wednesday to eliminate the state’s rule waiving work search requirements in order to be eligible for unemployment benefits. The waiver is currently set to expire in July.
If reinstated, unemployed people will have to perform four work-search activities each week in order to obtain benefits.
The GOP legislation follows a growing number of business organizations calling on Evers to end the state’s participation in enhanced federal unemployment benefits included in federal stimulus packages passed during the pandemic.
Enhanced unemployment benefits provide individuals $300 in weekly unemployment benefits in addition to the state’s maximum weekly benefit of $370.
On Monday, 50 chambers of commerce, including Wisconsin Manufacturers and Commerce, sent a letter to Evers again asking that the state stop participating in the enhanced federal unemployment program, which the organizations said exacerbates workforce shortage challenges that were present in the state long before the pandemic.
Other organizations and some Democratic lawmakers have said it’s premature to strike federal unemployment benefits in Wisconsin and the focus should be on eliminating barriers to employment by improving access to child care, expanding BadgerCare eligibility and increasing the minimum wage, which has remained at $7.25 an hour since 2009.
Shawn Phetteplace, state manager for the Main Street Alliance, said the organization disagrees with assertions that enhanced unemployment benefits are the number one factor related to staffing shortages by some businesses. Phetteplace said bigger issues include access to affordable child care and the ongoing impacts of the pandemic on demand at businesses such as restaurants.
“It will take time for these issues to be resolved, but the best way we can help address it is to make it easier for small businesses to provide the benefits folks need to be able to work,” Phetteplace said in an email.
WMC and the business groups also called on Evers to use some of the federal stimulus to provide sign-on bonuses to create more work incentives and to reinstate Wisconsin’s talent attraction campaign, which started in 2018 under former Gov. Scott Walker, in order to recruit additional employees to the state.
After the state’s unemployment rate skyrocketed to about 14% in April 2020 due to the pandemic and subsequent shutdowns or restrictions on several industries, it began to slowly fall last year. As of March, the unemployment rate was 3.8% — near the 3.5% rate in February 2020, according to the state Department of Workforce Development.
The state was still down 129,000 non-farm jobs and 98,300 private-sector jobs when compared with last March.
David Kyhn, who provides in-home care to seniors in Milwaukee and Waukesha, said during the press conference applications have been down 75% so far this year compared to the final six months of 2020, despite providing a 25% increase in wages and offering sign-on bonuses.
“Nothing seems to work,” Kyhn said. “I know it’s across our industry … everyone is desperate.”
Evers has said the growing number of vaccinations across the state will play a key role in getting more people back to work. Nearly 40% of the state’s population has been fully inoculated, according to the state Department of Health Services.
As many businesses across the state work to rebuild their staffing levels as COVID-19 restrictions continue to relax, some restaurants, bars and inns could also be eligible for federal assistance through the Small Business Administration’s Restaurant Revitalization Fund.
Through the program, businesses — including restaurants, bars, bakeries, food trucks, breweries, wineries, distilleries and inns — can receive up to $10 million per business in funds equal to what they lost during the pandemic. Applications are being accepted at https://restaurants.sba.gov.
Those funds can be used to pay staff, cover rent or mortgages, utilities or construction of outdoor seating, among other uses, and must be spent by March 11, 2023.
In addition to the federal program, Evers also announced earlier this year plans to allocate $420 million in federal stimulus funds to businesses affected by the pandemic.
While details have not been formalized, Wisconsin Economic Development Corp. officials say businesses with annual gross revenues between $10,000 and $7 million are expected to be able to receive $5,000 in grant funds.
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