These two emergency federal supports put money into the pockets of struggling Wisconsin families and injected much-needed dollars into the local economy, saving thousands of jobs and reducing the severity of the recession. These benefits supported consumer spending during a critical period, when the economy was severely weakened by a major financial crisis, and helped sustained demand for business products across the country and in Wisconsin.
Wisconsinites received $833 per person from these two forms of federal aid over this period: $573 from unemployment benefits and $260 from the payroll tax cut. Because a large share of this aid took the form of significant tax cuts that that showed up in worker’s paychecks, many Wisconsinites may not realize that they benefitted.
People in every county of the state benefited from these provisions. For example:
- Milwaukee County residents received an estimated $675 million in additional weeks of benefits for people who lost their jobs.
- Ashland County residents received $4 million through the payroll tax cut.
- La Crosse County residents received a total of $77 million through both benefits combined.
These two benefits are scheduled to end at the end of 2011. President Obama has proposed extending and increasing the cut in payroll taxes, and continuing the additional aid for long-time jobless workers.
If Congress fails to act, the expiration of these emergency provisions could further slow the already anemic recovery. Unemployment rates are still high, hovering just under 8% in Wisconsin and at about 9% nationally. After past recessions, Congress kept additional unemployment benefits in place until the unemployment rate was below 7.2%. Nationally, unemployment benefits paid by the state and federal governments kept more than 3 million people out of poverty in 2010, according to the Census Bureau.
The extended unemployment benefits and payroll tax cuts are just part of the Recovery Act measures that have been put $8 billion directly into the pockets of Wisconsin residents over the last three years to stimulate the economy; however, most of the others have already expired. The Wisconsin Budget Project has completed a county-by-county analysis of how much Wisconsin has received from six different direct benefits from the Recovery Act. It can be found on the Budget Project website.