THU AM News: Economic recovery not distributed evenly across income brackets; UI backlog falls over 1 percentage point this week

— While the U.S. economy has shown significant signs of recovery since the spring, benefits from the recovery have not been evenly distributed across all income brackets.

Manuel Rosado, president of Spectrum Investment Advisors, told viewers of a Metropolitan Milwaukee Association of Commerce virtual event that the strong recovery has been led by a few key sectors.

Federal stimulus packages in March helped businesses through the pandemic. But lower income families saw about a 20 percent job loss rate while the top 20 percent of earners in the country saved about $1.3 trillion in cash since the start of the recession, he said.

He predicted the Federal Reserve is “likely going to continue an accommodating policy that will keep interest rates low” in order to keep the recovery momentum going.

Rosado predicted the federal government’s second stimulus package, worth between could come out as early as Friday. He said the package is primarily focused on the unemployment benefits that are set to expire on Dec. 26, including small business aid.

But he’s uncertain about whether aid to state and local governments or legal protections for corporations with regard to COVID-19 will be included.

Rosado sees the uneven recovery as an opportunity for investors to take advantage of the market by investing in companies that have positioned themselves to make new purchases at the beginning of 2021 with any cash they managed to save.

These companies, he said, are better positioned to invest in skilled labor positions and make acquisitions by taking advantage of the current low interest rate environment that’s likely going to stick around.

Rosado suggested businesses focus on employee training and education because competition in the skilled labor market remains stiff with workers in high demand.

Despite a promising overall economic outlook, Rosado said he is worried about a strong recovery for lower-income groups.

“One the one hand it’s going to be positive because there’s a lot of dry powder to be spent and a lot of money to be spent in high-end products, high-end demand,” he said. “But yes, we have a concern about that lower tier of our earners, and making sure that we keep a more balanced approach going forward.”

— The Department of Workforce Development’s unemployment backlog fell to 4.32 percent from 5.55 percent last week.

DWD records show the high was 16.4 percent between March 15 and May 23.

The current backlog is equal to about 41,734 unique claimants held up in adjudication by one or more weeks due to multiple issues. Compared to last week, that’s 18,469 fewer Wisconsinites waiting for a UI check.

Issue resolution is considered timely if completed within 21 days of the date the issue was detected. As of Friday, 35,383 claimants had been waiting for 21 days or more for their claim to be resolved, a decrease of 15,550 from Dec. 8. The average number of days from application to payment of UI is 28.

DWD has paid about 576,650 claimants over $4.55 billion since March 15, an increase of 10,385 claimants and $70 million over last week.

— Republicans in a Joint Legislative Audit Committee chided the Department of Workforce Development for not doing enough at the start of the COVID-19 pandemic to prevent a backlog of Unemployment Insurance claims.

Dems on the committee instead placed much of the blame on legislative inaction and previous GOP policy that gummed up the bureaucratic process.

At the peak of the problem, the agency fell behind more than 100,000 UI claims after its call center and online application process became overwhelmed with an influx of out-of-work Wisconsinites. DWD officials yesterday said there are still some 30,000 cases backlogged but they expect to wrap up most within the next few weeks.

They also noted that, before the pandemic hit, only about 6.6 percent of all claims came through the department’s call center. After the pandemic began in earnest in March and April, DWD received more than 40 million calls, with 93.3 percent of those either blocked or marked as busy due to the sheer volume.

Committee co-chair Rep. Samantha Kerkman, R-Salem, said lawmakers’ offices also received a flood of constituents asking for help navigating the unemployment crisis. She said DWD should’ve immediately opened up and revamped its recession playbook at the first signs of the crisis hitting the state in March.

“Our staff became the front lines for your guys,” she said. “In some cases, our offices became call centers. Going forward, I hope that your plan includes partnerships that you never even thought of before.”

Amy Pechacek, DWD transition director, told the committee the pandemic was “a crushing experience,” and that the agency couldn’t have kept up with the influx of claims with the resources it had no matter what it did.

She added the department got caught with the pandemic right as it worked through implementing new federal unemployment guidelines. And from March through last week, she said, DWD received some 8.7 million weekly UI claims, more than the total claims received in the previous four years combined.

“So we basically had four years of weekly claims in nine months,” Pechacek said.

Meanwhile, Rep. Katrina Shankland, D-Stevens Point, noted the Legislative Audit Bureau didn’t compare Wisconsin’s issues adjudicating claims to other states. She suggested a closer LAB look at adjudication issues would be helpful, along with a closer look at laws that she said add “time and inefficiency to the process.”

“At this point, no amount of staff can speed up a process if state statutes are the piece that is slowing the process down,” she said.

Pechacek echoed some of Shankland’s sentiment, calling the department’s UI infrastructure so “antiquated” that it added “a significant amount of time” for officials to even prepare for the claims with additional CARES Act funding attached.

But Sen. Chris Kapenga, R-Delafield, told Pechacek the agency needed to “step up” its overtime hours for employees to keep up with demand. He called the DWD’s average overtime of three hours a week per employee not good enough and suggested even 50 hours of work a week shouldn’t be considered too much in a crisis.

Pechacek shot back that the three-hour overtime average actually amounts to around 41,000 total hours of overtime work. And she said the statistic doesn’t account for salaried employees or for all of the vacation time workers lost to instead work on filing claims.

“The staff really is dedicated to the mission of the unemployment office and understands that these are real people, these are families, our neighbors,” she said, noting DWD employees not only had to work on claims but also had to deal with the stresses of the pandemic just like everyone else.

During the hearing, state Sen. Alberta Darling, R-River Hills, asked officials why former DWD Secretary Caleb Frostman wasn’t testifying. Frostman left the agency back in September after Gov. Tony Evers asked for his resignation.

Darling said she wasn’t aware he had been fired. But at the time, she criticized the guv over Twitter for “too little too late” in removing Frostman from leading the agency.

Watch the hearing:

— A new report suggests DNR should test all public water supplies in the state for per- and polyfluoroalkyl substances.

The PFAS Action Council in its plan calls for, among other things, science-based PFAS regulations, the testing of all municipal water supplies and funding for the Department of Natural Resources to collect unwanted PFAS-containing firefighting foams from fire departments and replace them with more environmentally friendly alternatives.

PFAS are a large group of human-made chemicals that have been used in industry and consumer products worldwide since the 1950s including non-stick cookware, fast food wrappers, stain-resistant sprays and certain firefighting foams.

The contaminants have made their way into the environment through PFAS-containing materials, discharges of PFAS-containing wastewater to treatment plants and certain firefighting foams. The chemicals can stay in the human body for many years, according to the DNR, and have been linked to severe health problems.

Gov. Tony Evers last year established the council via executive order to collaborate with 17 state agencies to develop new protocols in the state to deal with the pollutants.

“I am proud of the efforts from our state agencies and the contributions by the public to connect the dots and develop this comprehensive blueprint for our state to address these forever chemicals,” Evers said in a statement. “I look forward to evaluating the plan and the dozens of recommendations provided to find how we can best move our state forward in addressing PFAS for the health of our families, communities, and wildlife.”

The DNR has already begun plans to test municipal water supplies, starting with those closest to known contaminated locations. Yesterday’s report suggests the agency would need another $750,000 in state funding to complete testing for all wells statewide.

But the report doesn’t have a total price tag for what it would cost the state to implement all of its plans.

Read the plan:

— The Vaccine and Related Biological Products Advisory Committee is set to review the data on the Moderna vaccine and make a recommendation to the FDA.

Pending approval of the vaccine, Wisconsin is slated to receive about 100,000 doses.

But that’s not set in stone, said Department of Health Services Secretary Andrea Palm. The department does not have a final decision on where the vaccine will be distributed. But since it does not require ultra-cold storage, it will be shipped from the manufacturer to the end-vaccinator and not via the agency’s hub-and-spoke model like the first vaccine.

Due to those reduced logistics, the Moderna vaccines will allow for more doses to go to rural clinics, said Division of Public Health Immunization Program Manager Dr. Stephanie Schauer.

DHS has designated a portion of the pending 100,000 doses of Moderna for skilled nursing facilities. The federal government’s pharmacy distribution program to get COVID-19 vaccine to skilled nursing facilities — a partnership between the CDC and the pharmacy chains Walgreens and CVS — required Wisconsin to have enough vaccines “in the bank” to set aside for patients and staff in skilled nursing facilities. The pending vaccines are enough to set aside roughly 57,000 doses needed for those people, Palm said.

The program also required a two-week notice, so vaccinations in those facilities will begin at the end of the month after DHS activated the program earlier this week, Schauer said.

The speed at which the state will administer the Moderna vaccine — and the Pfizer vaccine — depends on information DHS does yet have: how much and how often it will receive allocations.

<i>For more of the most relevant news on the coronavirus outbreak, reports on groundbreaking health research in Wisconsin and links to top stories, sign up today for the free daily Health Care Report from and

Sign up here: </i>

— The Governor’s Blue Ribbon Commission on Rural Prosperity proposed updating state laws that restrict local governments, including those that prevent them from setting their tax rates or providing broadband service.

“The state should be setting the floor, not the ceiling, for local governments in Wisconsin,” the report declared.

The recommendation was one of 10 the task force proposed to help rural communities. Others include reinvesting in the University of Wisconsin and its campuses, along with tech and community colleges. The call included working with UW-Extension offices to develop strategies specific to each region of the state.

Another recommendation proposed changing the state’s business incentives to “ensure economic development prioritizes the assets of Wisconsin people, communities and businesses.” According to the report, stakeholders recommended to the task force an economic development program designed specifically for rural communities. They also suggested sustaining state funding, investment and finance for small business development.

See the release:

— The State of Wisconsin Building Commission has approved a total of approximately $350 million in key projects across the state.

“Whether maintenance and repair or renovating and expanding buildings where our UW students will learn and innovate, these projects are important investments in the future of our state’s infrastructure,” said Gov. Tony Evers, who chairs the commission.

Highlights of approvals include improvements at the Central Wisconsin Veterans Memorial Cemetery; several design, construction and renovation projects at UW-Madison, UW-Milwaukee, UW-Whitewater and UW-Stout; and eight maintenance and repair projects located at various locations in five counties for three state agencies and the UW System.

— Expert Institute LLC, a legal software company that connects attorneys with subject matter experts, will locate its Midwest office in Milwaukee.

Expert Institute links attorneys with subject-matter experts across a wide range of legal practice areas. The company recently introduced its first software solution, Expert iQ, an expert witness management platform.

“Wisconsin continues to attract national businesses that are leaders in innovation,” said Gov. Tony Evers in his announcement. “We welcome Expert Institute’s decision to locate here and to join the growing number of businesses that are choosing to locate in Milwaukee and southeast Wisconsin because of our well-trained, well-educated workforce and support for entrepreneurs.”

The Milwaukee office, located in the Third Ward, is Expert Institute’s third, joining its headquarters in New York and an office in Los Angeles. The Milwaukee office will serve as a hub for Expert Institute’s research and software development teams.

The company currently employs more than 140 workers nationwide and expects Milwaukee employment to grow to 75 within three years. According to the guv’s release, the project could indirectly generate 56 additional jobs. Those 131 total new jobs are expected to have an annual impact of more than $267,000 in state income taxes.

— The Wisconsin Technology Council is hosting a virtual event on Jan. 14 to discuss CRISPR’s role in fighting against the growing problem of human resistance to antibiotics.

CRISPR is a biological tool that may be used to improve crops, make mosquitoes resistant to malaria and treat genetic diseases. It allows researchers to spot a gene defect inside living cells and use molecular “scissors” to snip that spot, thus deleting, repairing or replacing the affected gene without damaging others. CRISPR is shorthand for “clustered regularly interspaced short palindromic repeats”.

Panelists at the event are Dr. Jo Handelsman, director of the Wisconsin Institute for Discovery at UW-Madison, and Dr. Krishanu Saha, associate professor at UW-Madison.

Saha’s lab is using CRISPR and other tools to engineer new cell and genetic therapies. Handelsman is known for her work around antibiotics resistance, which is on the rise globally as microorganisms develop defenses against methods devised to kill them.

Learn more and register:

— Former Insurance Commissioner Ted Nickel was unanimously elected to the Wisconsin Water Alliance’s board of directors.

Earlier this year, former Assembly Speaker and Department of Administration Secretary Mike Huebsch was elected as the organization’s president.

“It’s a critical time for water, and we must ensure that public policy protects this precious resource without penalizing the good stewards who rely on it to power our economy,” Nickel said in a statement. “I look forward to working with leaders across the state to advance commonsense solutions while standing against efforts to unnecessarily overregulate responsible water users.”