Republican lawmakers and business lobbyists joined Tuesday in calling for an end to supplemental federal unemployment pay in Wisconsin — blaming the $300 weekly extra payments for labor shortages even though employers have said for years they were struggling to find workers.
The draft legislation is the second of two steps GOP lawmakers are taking to make it harder for applicants to obtain unemployment compensation. On Wednesday, the Joint Committee for the Review of Administrative Rules (JCRAR) will vote on whether to require that people on unemployment resume looking for work every week to qualify for benefits.
The work-search requirement has been suspended since early in the COVID-19 pandemic under an emergency rule. JCRAR’s vote Wednesday would end the rule, which is set to expire in July.
With both measures, Republican lawmakers are citing the struggles of employers who say that they can’t find workers. Democrats have denounced the steps as ineffective and harmful.
‘Get people off of the sidelines’
At a Capitol news conference Tuesday, Republicans unveiled draft legislation to end the federal unemployment supplement. “We’re hoping that by taking away some of the bonus benefits,” employers will more easily recruit workers, suggested Assembly Speaker Robin Vos (R-Rochester). “We really need to get people off of the sidelines and into the workforce.”
Sen. Howard Marklein (R-Spring Green), described conversations with business owners of all sizes in his district — as well as a local highway department — who complained they couldn’t find workers. He said 21 other states have already begun phasing out the federal supplemental pay.
The Republican draft bill would pull Wisconsin out of three separate federal supplemental programs, including ones for people receiving regular unemployment compensation from the state as well as people who would not normally qualify for unemployment insurance, such as the self-employed and people who collect Social Security Disability income but are also permitted to work part-time. The bill would also bar the state Department of Workforce Development from waiving the work search requirement in connection with the COVID-19 pandemic.
Ron Buholzer, who co-owns Klondike Cheese Co. in Monroe with other members of his family, said at the GOP news conference that the 171-employee company has an additional 34 open positions and had raised its starting hourly wage to $16. “When we went to $14 we still weren’t getting any applicants,” Buholzer said, “$16 has helped a little but we’re still very, very few applicants.”
David Kane, owner of a business that provides non-medical services to seniors and to people with disabilities, said job applications have decreased 75% in the first part of 2021 compared with the last six months of 2020. Despite a 25% wage increase and “very generous signing bonuses,” he said, “nothing seems to work.”
Vos said his own business, a popcorn wholesaler and packaging company, has been unable to fill about 35 positions, with no-shows for job interviews and sometimes by people who have been offered jobs.
The Republican legislation follows a letter that Wisconsin Manufacturers & Commerce and more than a dozen other business lobbying groups sent to Gov. Tony Evers Monday, also urging him to turn back the expanded benefits.
‘An insult to workers’
Marklein, recounting an anecdote he has told previously, quoted an unidentified “pretty significant employer in my area” who, he said, told him, “We’re no longer competing with other employers. We’re no longer competing with Illinois. We’re no longer competing with Iowa. We’re competing with the couch.”
But Rep. Francesca Hong (D-Madison) says that description ignores what workers, especially low-wage workers, have had to go through the past year during the pandemic. Hong said she hopes Gov. Tony Evers will veto the bill if it gets through the Legislature.
“It’s short-sighted and it’s an insult to our workers,” Hong told the Wisconsin Examiner. “There is no evidence that being on enhanced unemployment benefits [dis]incentivizes workers from entering the workforce. In fact, it’s the opposite.” The additional federal support gave job applicants resources in their job search, such as to cover the cost of child care “so that you can go to a job interview,” she said.
A letter to Republican leaders from the lead Democrats on three Assembly committees with responsibility for job and employment issues and Sen. Janet Bewley (D-Mason), the Senate minority leader, referred to a Chicago Federal Reserve report in June 2020 that found “folks who are collecting enhanced unemployment benefits actually put more effort into searching for jobs than those who have exhausted their benefits.”
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Sen. Chris Larson (D-Milwaukee) believes better compensation would increase applications. “Savvy businesses are going to have to entice workers by boosting wages and providing other benefits,” he said.
Anticipating that argument, Vos said that even employers paying $20 or more an hour have had trouble finding workers.
But Hong, who is a Madison restaurant owner, says her business has been able to recruit new workers. “We’ve been excited about the interviews that we’ve gotten,” Hong said. “Providing more choices to workers is going to be a good thing for the workforce — it’s incredibly unfair for business to think that they can have a choice in workers and workers can’t have a choice in their jobs.”
While the labor shortages that employers have been reporting recently may be especially acute, Wisconsin manufacturing advisor Buckley Brinkman says that they primarily result from trends that long predate the pandemic.
Indeed, they aren’t unique to Wisconsin or even the U.S., according to Brinkman, executive director and CEO of the Wisconsin Center for Manufacturing and Productivity.
“Going into the pandemic, manufacturing was already having a huge squeeze on employment,” Brinkman told the Wisconsin Examiner. “The workforce in Wisconsin has been flat and will be flat for decades. It’s a developed-nation issue — you see that around the world.”
Other pandemic-related factors have also played a role, such as the shrinking availability of child care, which has kept women in particular from returning to the workforce during the pandemic, Brinkman said. But employers will need to adjust in order to draw into the workforce people who haven’t historically been in it.
“What I worry about is all of the discussion of ongoing unemployment benefits takes attention away from the chronic problems we’re facing,” he said.
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