closing down sale

By Chris Rickert, Wisconsin State Journal

In a single month, due to a single virus and associated government-mandated shutdowns, Wisconsin’s unemployment rate has more than quadrupled from a historic low to a historic high.

The state Department of Workforce Development on Wednesday reported that Wisconsin lost 385,900 private-sector jobs from March to April, and the unemployment rate shot up from 3.1% to 14.1%.

“Today’s report shows the significant impact that the COVID-19 global pandemic has had on the Wisconsin economy, and underscores the importance of rationally and safely reopening our state,” DWD Secretary Caleb Frostman said in a statement. “A strategy based on science that reduces the likelihood of additional outbreaks and further economic instability is the only way to get Wisconsin back on the path of historically low unemployment rates that the state was experiencing prior to COVID-19.”

Wisconsin is doing slightly better than the nation as a whole. The national unemployment rate is 14.7%, while its labor participation rate, 60.2%, is 6.4 percentage points lower than Wisconsin’s.

Still, the current numbers — culled from survey data in mid-April — are worse than that seen in the Great Recession, when the unemployment rate neared 10%. Only during the Great Depression was a greater slice of the workforce out of work, according to DWD chief economist Dennis Winters.

Then the unemployment rate is believed to have hit around 25%, but only after several years. “This is a totally different egg,” Winters said, in terms of how quickly the job market has collapsed.

In April 2019, the state had recorded its lowest unemployment rate ever at 2.8%.

While the economy has been hemorrhaging jobs, DWD has come under increasing fire from the jobless and some lawmakers for its alleged inability to get benefits out to people quickly enough — or at all — and to provide help to people who have questions or complicated claims.

Satori Nelson, 25, of Sun Prairie, said she was formally laid off from her full-time job as a restaurant manager in Madison at the end March, and her first claim for unemployment was because she had to self-isolate due to symptoms of COVID-19.

But since then, her weekly claims have listed joblessness as her reason for seeking benefits, and so far none of those checks have come through. She estimates she’s eligible for about $6,300 at this point.

Her husband has continued to work from home, but the couple has a young son and “we’re probably at the point where this month is going to be pretty tight to pay rent.”

In La Crosse, Jessica Waller-Simdars has owned a small home-cleaning business for more than 10 years. But when the coronavirus hit, business largely dried up because some of her regular customers had to stay at home or had medical conditions that made it unsafe for her to go into their homes.

So the 44-year-old mother applied for benefits under a new federal program for gig workers and the self-employed, Pandemic Unemployment Assistance, the day the application period opened, on April 21, but has received nothing since, she said. Trying to find out why has been impossible, largely because of the difficulty of getting through to a live person over DWD’s clogged phone lines.

“It’s like winning the lottery when you get through,” she said, but even when she does, no one has been able to answer her questions. “With PUA, it’s all just a big mystery,” she said.

In a statement before Thursday’s jobs numbers release, the co-chairman of the Legislature’s Joint Finance Committee, John Nygren, R-Marinette, laid the blame for such problems at the feet of the Democratic Gov. Tony Evers’ administration.

“Gov. Evers, the buck stops with you,” Nygren said. “DWD needs to spend more time working to find ways to speed up the claims process and less time making excuses for their inability to effectively process unemployment claims. We have constituents that have been waiting over 60 days for benefits. Enough is enough. We need more action and less time passing blame.”

He also called on the agency to expand its call center hours and be open seven days a week until the agency’s backlog is eliminated.

DWD said that regular unemployment benefits are taking 17 days, on average, to reach applicants from the time they first apply. It did not have data on how quickly it’s turning around claims under the Pandemic Unemployment Assistance program.

On Monday, DWD reported that of approximately 2.1 weekly claims received between March 15 and May 16, 1.4 million have been paid, amounting to about $1.14 billion, including additional federal benefits, sent to the state’s out-of-work. Federal Pandemic Unemployment Compensation made up about $726 million of what’s been distributed.

It could not say how long people are waiting to get through by phone to a DWD operator, but said it’s planning to increase call center staffing to 500 by mid-June.

DWD and Evers’ office did not immediately respond to requests for comment.

Data from DWD show that in the three-week period from April 26 and May 16, the total number of initial claims for unemployment dropped from 39,278 to 31,851 a week, with the agency seeing anywhere between about 1,200 and 9,800 initial claims per day.

Claims to continue getting unemployment benefits were about flat during the same period, though, at between about 334,000 and 339,000 per week.

The data suggest that while a historic number of people continue to lose their jobs, that number is slowly declining. At the same time, those who had already been out of work weren’t finding jobs to go back to.

After the Evers administration’s “safer at home” order was struck down by the state Supreme Court on May 13, daily claims to continue benefits started to taper off slightly, according to data that go through Tuesday.

Winters said it’s “too early” to say whether the decline is related to the order being struck down and people in many parts of the state being allowed to return to work, but he said there’s a less than 50% chance the state’s jobless rate will reach the 27% level the agency predicted in April.

Nearly 550,000 people applied for unemployment between March 15 and May 16, and 81,286 made claims for PUA.

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