Slashing Safety Net Will Weaken Workforce

The COVID pandemic and the recession it caused illustrated the tremendous importance of public benefit programs like BadgerCare, FoodShare, and Unemployment Insurance. Yet a number of Republican legislators are trying to hurriedly pass a package of bills that would weaken the sources of public assistance that have been so critical over the past two years in reducing the pandemic’s harm to workers, families and the economy.

The package of bills is being promoted as a way of strengthening the workforce, but it is much more likely to have the opposite effect because it would weaken programs like BadgerCare and FoodShare that keep many workers healthy and well nourished. In addition, it fails to address the real reasons for the shortage of workers, such as the acute shortage of affordable child care.

By weakening Wisconsin’s safety net programs, while turning a blind eye to the real impediments to work, the proposed bills will exacerbate the growing economic divide in our state. That gap has particularly harmed Wisconsinites of color, who face substantial barriers to success and endure some of the most alarming racial disparities in the nation.

A couple of the proposed bills will significantly reduce access to unemployment insurance (UI) benefits. Proponents of those bills argue that Wisconsin’s unemployment assistance hurts the economic recovery by contributing to a shortage of workers. However, the fact of the matter is that Wisconsin is in the top ten nationally in the percentage of adults in the workforce, and our state’s current unemployed rate of just 2.8% is at an all-time low.

One of the UI bills (SB 906) would drastically reduce the maximum number of weeks of UI benefits when the unemployment rate is low. The current ceiling of 26 weeks would only be allowed after the unemployed rate averages at least 9% for a quarter of a year. As that standard is written in the bill, the 26-week limit that has long been the maximum would have only been in place for 6 months since 1984.

That change, like many of the other proposals, would not affect all Wisconsinites equally. A report by the National Employment Law Project explains why slashing the length of UI benefits disproportionately hurts workers of color.

Another alarming aspect of SB 906 is that the number of weeks of potential benefits is not based on the current unemployment rate; it’s determined by the average rate up to nine months earlier. If that illogical change had been in place in 2020, someone who lost their job during the peak of the pandemic when the unemployment rate was 15% would have only been eligible for up to 14 weeks of state UI payments (based on the unemployment rate in the fall of 2019).

Other bills in the fast-tracked package would also hurt families who are doing their best to make ends meet. For example, one bill would disqualify some adults from their BadgerCare coverage for six months if they turn down any offer for a full-time job, increase in hours, or wage increase – even if that job doesn’t offer health insurance that the worker can afford, has hours they can’t make work, or is totally unsuitable for their circumstances. Another bill creates costly and unnecessary red tape and hoops everyone will have to jump through to renew their BadgerCare coverage.

These two bills would weaken the Wisconsin workforce because access to affordable health care keeps employees healthy and more productive, ensuring they have more time to spend on the job and take care of their families. Roughly three-fourths of adults with BadgerCare coverage are working, many in jobs that either do not offer health insurance or provide it at a price that is unaffordable for low-wage workers. We must protect BadgerCare so Wisconsinites who are eligible can access the care they need, and families have financial security to help them through tough times.

You might have a feeling of déjà vu about this group of bills and the very abbreviated process for pushing them through the legislature. A very similar package was rushed into law by Republican legislators and Gov. Scott Walker four years ago. Although they hastily enacted nine bills during a special session, many of the policy changes did not go into effect because federal agencies and courts determined that they conflicted with federal law, and the same thing is likely to happen with several bills in the new package.

It’s very difficult to believe that these proposals constitute a good faith effort to address the worker shortage because the authors of these bills have shown little interest in policy measures that would significantly boost the number of workers. If they truly want to accomplish that goal, they should listen to workers and potential workers about the barriers to work, and they should develop a nonpartisan agenda.

Based on conversations with nonprofits that work with Wisconsinites who are facing barriers to health and economic security, here is our list of recommendations for how Wisconsin can expand the workforce in ways that will help workers, their families, and the state’s economy:

• Because a sharp drop in child care slots has forced many parents to drop out of the workforce, policymakers need to increase access to child care by substantially boosting funding for the child care subsidy program and creating more flexibility in the program, so it serves parents with erratic work schedules.
• Make adults without dependent children eligible for the state Earned Income Tax Credit (EITC), so low-wage jobs aren’t a poverty trap. Research shows that these credits do a great job of promoting work, but among the 30 states that have EITCs, only Wisconsin excludes workers who aren’t custodial parents.
• Stop suspending driver’s licenses for low-income people who are unable to pay fines, if those fines are unrelated to driving.
• Increase the minimum wage, which has been frozen at $7.25 per hour since 2009.
• Provide paid sick leave and family leave. This would not only help families, but would also benefit our economy by increasing worker retention and creating a more stable workforce.

State lawmakers need to ensure that all Wisconsin residents have an equitable ability to succeed. There’s no reason why policymakers shouldn’t be able to build a bipartisan, common sense agenda that removes barriers to work, reduces the severe racial disparities holding back our state,  and maintains the safety net programs that helped us get through the 2020-21 recession. However, the current proposals would exacerbate Wisconsin’s racial inequities, and do little to bolster the workforce. The process for building an equitable and effective agenda should involve impacted families and should be considered with careful deliberation, rather than being rushed through the legislature  just a couple of weeks after the bills were introduced.