Fallout from the weakening economy is hitting the states. Wisconsin’s unemployment insurance fund is not immune to the fallout. Hundreds of thousands of workers have exhausted their unemployment insurance and new applications for benefits are quickly outpacing the pace of last year’s benefits applications, according to the Milwaukee Journal Sentinel.
The news comes on the heels of General Motors Corp.’s announcement that it will speed up plant closings as demand for its trucks dwindles and a Janesville, Wis., factory is one of the casualties, according to Bloomberg News. The sport-utility vehicle factory has 1,200 union workers and will close Dec. 23, two years earlier than planned, the news agency reports. The plant makes the Chevrolet Tahoe and Suburban as well as the GMC Yukon and Yukon XL.
GM also announced Oct. 3 it will shut down an Ohio SUV plant by year-end instead of the originally announced 2010 date, according to Bloomberg News.
Through August, more than 200,000 workers in Wisconsin have exhausted their unemployment insurance benefits, according to the Milwaukee Journal Sentinel. At the same time, new applications for the benefits are ahead by nearly 13 percent from the 2007 pace through the first 40 weeks of the year, the newspaper reports.
“No one will lose benefits,” Dick Jones, a spokesman for the state agency, told the Milwaukee Journal Sentinel.
But the state fund covering the unemployment insurance claims might be in a crunch. The fund covering the unemployment insurance claims is currently at $396 million, down from its high of $558 million earlier this year, the newspaper reports. That should be enough to pay benefits through the end of the year, Jones told the newspaper.
“At the current rate, we estimate the reserve fund will be short of funds early next year,” Jones told the newspaper. “At that point, we have the option of borrowing from the federal government.”
In 1982, Wisconsin was in a similar situation and had to borrow $737 million from the federal government to cover a rush on unemployment benefits, the Milwaukee Journal Sentinel reports. However, it took the state seven years to retire that loan, according to the newspaper.
“At this point, we don't see this as a crisis, but we're obviously on top of it and watching it closely and prepared to move in the right direction," James Buchen, vice president for government relations at Wisconsin Manufacturers and Commerce, told the newspaper. “You've got to balance the idea of the downside of borrowing against the downside of raising taxes on employers in a recession. They both have their problems.”
The National Employment Law Project, which tracks legislation and activity related to state and federal unemployment benefits, said Wisconsin along with other states such as California, Michigan, Missouri, New York, Ohio, South Carolina, Indiana, Kentucky and Arkansas have less than six months worth of unemployment trust fund reserves, putting the funds at high risk of insolvency in the coming year, according to CNN.com.
All those laid off will find work, there is a still a strong demand for talent and I still see lots of high paying jobs posted on popular employment sites:
www.linkedin.com (networking)
www.indeed.com (aggregated listings)
www.realmatch.com (matches you to jobs)
I see six figure jobs all over the place.
Posted by: Rachel Foster | October 18, 2008 at 11:03 AM