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Commentary: State workers feel recession ripple

Matt Pommer

An estimated 1,400 state workers face layoffs, and the bulk of them are in the Madison metropolitan area.

They will join the record 230,000 Wisconsin residents collecting unemployment compensation.

The layoffs are the latest attempt by the state to balance its budget. Unlike the federal government, state and local governments must balance their books. State revenue estimates have declined four times since the fall of 2007.

In addition to layoffs, thousands of non-union agency employees will be required to take 16 days without pay in the next two years. That amounts to about a 3 percent reduction in their annual salaries.

The 1,400 facing layoffs will be eligible for unemployment compensation. Those who lose 16 days of pay won’t be eligible for unemployment compensation as they will remain employed a few days a week.

There’s one difference between unemployment compensation for private sector workers and public sector employees. Private employers participate in an insurance program to which they all contribute. Their premiums are based on how much their workers use the system.

For public sector workers, the Division of Unemployment Insurance pays claims, then bills the employing governments for the payments. State and local governments do not pay unemployment compensation taxes or participate in the insurance program.

When a claim is filed, the state looks at the worker’s earnings for the previous year. It then locks in the quarter in which the most money was earned. If a worker earned $1,350 during that quarter he would be eligible for the minimum weekly benefit of $54. If he earned $9,075 or more during that three month period, he would qualify for the maximum weekly benefit of $388.

The average weekly benefit is now $240 a week. Regular state benefits are available for 26 weeks, and federal emergency benefits are available for an additional 33 weeks.

There is a third period of benefits during periods of extended unemployment, which is clearly where Wisconsin is. It now covers 20 weeks, including 13 from the state’s extended benefit program and seven more just provided through federal money.

America’s economic downturn is wide and deep. A year ago there were about 75,200 people receiving unemployment compensation in Wisconsin. That has more than tripled.

Matt Pommer worked as a reporter in Madison for 35 years. He comments on state political and policy issues.

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