Senate Committee Holds Hearing on Unemployment Insurance Program

On May 27, the Senate Committee on Labor and Regulatory Reform held an informational hearing on Wisconsin’s Unemployment Insurance (UI)  program. The hearing was held as Wisconsin unemployment numbers are at record highs, and many Republican legislators are criticizing Gov. Tony Evers’s administration for reports of major backlogs in UI requests.

As noted in the public hearing notice, the hearing focused on:

  1. The challenges facing and stability of the UI Program.
  2. The significant difficulties being encountered by citizens applying for and receiving UI benefits.
  3. The Department of Workforce Development’s (DWD) response to the issues being encountered by citizens applying for and receiving UI benefits.
  4. Trends and upcoming issues surrounding the transitioning of the unemployed receiving benefits back into the workforce either by return to previous employment or finding new opportunities in the economy.

First to testify at the hearing was Noah Williams, professor and director of the Center for Research on the Wisconsin Economy, who updated the committee on the state of Wisconsin’s economy mid-COVID-19. Williams said Wisconsin’s unemployment rate has jumped from 3.4 percent to its current rate of around 22 percent, numbers on par with other states.

According to Williams, leisure and hospitality industries were hit the hardest, with 57 percent of those jobs lost due to the pandemic. Williams projected 40 to 50 percent of job losses in that sector could be permanent.

Williams also noted that counties already facing economic difficulty were hit harder by coronavirus losses. Many of these rural counties also had relatively low numbers of COVID-19 cases.

Data from Williams’s presentation showed that economic activity had already slowed prior to Gov. Evers issuing his Safer at Home order, though Williams stated the order likely reduced retail foot traffic by an additional 20 percent. Although the state is reopening, economic activity is still significantly down. After the order was invalidated, tavern activity increased 60 percent and full-service restaurants increased 30 percent, but overall activity is still down 50 percent from this time last year.

Williams indicated that Wisconsin has likely hit its lowest point in mid-April and recovery is slowly starting.

Next, senators on the committee questioned DWD Secretary Caleb Frostman on how his agency is handling the unprecedented volumes of applicants and the subsequent backlog for distribution of UI benefits. Concerns from legislators included limited call center hours, staff shortages, and what Republicans characterized as a lack of urgency from Gov. Evers and DWD. Democrats on the committee blamed delays on DWD’s outdated computer system and what they said was a failure of the Legislature to fund modernization of the system.

Frostman said the outdated computer system is slowing down DWD’s response times, and call center hours are limited because staff needs time to process payments. Frostman said staff shortages are the key limitation that DWD is working to address. DWD has enhanced its call systems and increased the capacity of the UI help center by 200 percent. DWD has also transferred 150 employees to the UI division, utilized staff from other state agencies, and plans to hire up to 300 more. DWD is also working with a call center vendor to further expand capacity.

After DWD’s testimony, several representatives from Wisconsin’s UI Advisory Council spoke to the committee. Representatives from both the management and labor sides agreed that the best solution to UI problems is to get people back on the job. Testimony also emphasized the need to accurately process UI claims and prevent fraud. Those providing testimony included Wisconsin Manufacturers & Commerce, Wisconsin State AFL-CIO, Wisconsin Restaurant Association, and Wisconsin Pipe Trades Association.