The Wisconsin Policy Forum says the state is “clearly better prepared” for a recession that it was in 2007.
A new report focused on the state’s unemployment fund shows the state’s unemployment fund balance hit $1.74 billion at the end of last year. That marks the highest it’s been since 2010, when the fund bottomed out with a negative value of about $1.36 billion.
Still, the fund’s 2018 balance was below the federally recommended level of $1.9 billion.
The WPF report details the factors behind the fund’s drop and rebound. It also highlights a strategy for being better prepared for the next potential economic downturn.
Because unemployment benefits in the state have lagged behind the national average and rising inflation, report authors say some might want to boost those benefits, especially given the fund’s relatively strong balance and current low interest rates.
But interest rates could always rise again, and report authors say others might lean toward continuing to build up the fund’s balance.
“Of the many potential compromises, one might be to link higher benefits to certain triggers such as a rising unemployment rate,” they wrote in the report. “Such as approach would help to ensure expanded benefits — and the reserves to pay for them — are available when they are most needed.”
See more at WisBusiness.com.