Due to the rising number of citizens seeking unemployment insurance benefits, the Department of Workforce Development announced its plan to borrow $400 million from the Federal Unemployment Fund Friday.
DWD also plans to hire 83 additional employees to deal with the increase in unemployment claims.
The state’s unemployment rate, which was 5.8 percent in December, is estimated to reach 8 percent by the end of the year, according to the DWD.
Unemployment rates have also increased throughout the country. The U.S. Labor Department announced in January that 598,000 jobs have been cut nationwide, and the percentage of unemployed individuals in the United States has increased from 7.2 percent to 7.6 percent.
The increase in the number of unemployed citizens nationally has also had an effect on federal unemployment benefits. Instead of the initial 13 weeks individuals had to collect federal unemployment benefits, federal lawmakers recently expanded the collection period an additional 13 weeks.
Wisconsin’s DWD also provides job training, benefits and online programming to help unemployed individuals get jobs as well as unemployment insurance benefits from the state.
DWD spokesperson Dick Jones said although additional employees will be hired to handle the elevated number of unemployment claims, the federal loan money will only be used for unemployment payments to citizens.
The DWD expects to hear about the status of its loan application by the end of the week, Jones added.
Although there are concerns the additional employees will cause an increase to Wisconsin’s $5.4 billion budget deficit, Jones said it is necessary to have supplementary workers to handle the large number of unemployed individuals filing for benefits.
“We’re working really hard to get through this economic crisis,” Jones said. “We’ve extended the hours in our call center, and we’re hiring more people to help us deal with the massive number of claims.”
Many individuals trying to file for benefits have experienced problems with the automated phone system currently used to file claims, Jones said. The number of people filing for benefits has increased 67 percent since last year.
Rep. Gordon Hintz, D-Oshkosh, vice chair of the Committee of Workforce Development, said legislatures from all political affiliations are working to get Wisconsin citizens back on their feet while training them to be better equipped for the workforce.
“By giving people this kind of support, we’re keeping families and communities intact,” said Rep. Mark Honadel, R-South Milwaukee.
Despite the struggle caused by the faltering economy and its effect on the workforce, many legislators are optimistic about the future, economy and small businesses, said Rep. Penny Bernard Schaber, D-Appleton, the vice chair of the Assembly Committee on Jobs.
Rachel Vesco contributed to this report