Tagged: unemployment

Two days ago a friend of mine called me in a semi-panic. Her unemployment benefits were about to run out, and she had eighty-seven dollars to her name. She wasn’t going to be able to make the modest payment on her small house, and didn’t know what to do. Nor did she understand what was going on in the legislature. Someone had told her that the governor was signing a bill to extend unemployment benefits. Somebody else told her he was going to shorten them. Which, she wanted to know, was it?

Well, both, I said. The governor signed a bill Monday that extends eligibility for federal extended unemployment benefits for up to ninety-nine weeks.

That’s only, however, for people like my friend Karen, who already is collecting unemployment.

Next year, however, things will change drastically. Any Michigander who loses his or her job after January 15, 2012 will only be eligible for state unemployment benefits for a maximum of twenty weeks. That’s less than five months.

For years, jobless workers in Michigan have been able to collect benefits for a maximum of twenty-six weeks, or six months. They can collect them for longer periods of time now because the federal government decided to temporarily provide benefits, because of the lingering effects of the recession. Those effects are still hanging on in Michigan, where unemployment is still more than ten percent. Economists expect that to come down a little by next year, but we’re likely to continue to be a long way from full employment. What that means is that for many people, twenty weeks is not going to be enough time to find a job.

So why is our government making it tough for jobless workers? Interestingly, nobody is really coming forward to defend this. Governor Snyder said he signed this bill because it was necessary to extend benefits for those who are jobless now. He said he would have been happy to leave eligibility at twenty-six weeks, and blamed the legislature for shortening the time period. Why did they do this? Well, nobody is rushing forward to claim credit.

On Monday, Governor Snyder signed into law a bill that would extend unemployment benefits by 20 weeks to some 35,000 Michiganders. However, the bill also cuts six-weeks of state unemployment benefits for new filers beginning next year. The measure reduces jobless benefits in the state from 26 weeks to 20 weeks as of 2012. That reduction means, beginning next year, Michigan will provide the shortest number of weeks of unemployment out of any state in the nation.

Snyder’s signing of the bill has gained the state quite a bit of national attention.

From The New York Times:

Democrats and advocates for the unemployed expressed outrage that such a hard-hit state will become the most miserly when it comes to how long it pays benefits to those who have lost their jobs. All states currently pay 26 weeks of unemployment benefits, before extended benefits paid by the federal government kick in. Michigan’s new law means that starting next year, when the federal benefits are now set to end, the state will stop paying benefits to the jobless after just 20 weeks. The shape of future extensions is unclear.

The measure, passed by a Republican-led Legislature, took advocates for the unemployed by surprise: the language cutting benefits next year was slipped quietly into a bill that was originally sold as way to preserve unemployment benefits this year.

From NPR’s political blog:

Few states were hit harder by the Great Recession and unemployment than Michigan, a state that faced profound economic challenges, including relatively high unemployment, even before the national downtown.

So it could strike some as ironic that Michigan, of all places, just enacted into law a reduction of the number of weeks it will pay unemployment insurance to 20 weeks from 26 weeks starting next year.

The reduction will make Michigan the state that provides jobless benefits for the shortest number of weeks. And that's in a state whose jobless rate was 11.3 percent in February compared with the 9.5 percent national rate….

Gov. Rick Snyder, a Republican who took office this year, and GOP legislators said the reduction was necessary because the state's unemployment insurance fund is $4 billion in the hole as a result of its economic woes. Michigan borrowed from the federal government to keep the program afloat.

Since employers contribute to the state's jobless fund and were facing higher taxes to repay the federal loan, they supported the benefits reduction.

And, in a story picked up by USA Today, Chris Christoff with the Detroit Free Press, takes a hard look at the fact that Michigan owes, "the federal government about $3.96 billion that the state borrowed to pay unemployment benefits during the worst economy since the Great Depression. That's on top of the regular unemployment tax businesses and other employers must pay."

Snyder's signing of the bill also led some to speculate on whether or not other states would follow Michigan's lead in shortening benefits. An article in Examiner.com asks,"Will Ohio follow Michigan lead on reducing unemployment benefits?" And, in an article last week, the Washington Post noted:

This month, the Florida House approved a measure reducing the maximum benefit period from 26 to as little as 12 weeks while curbing increases in unemployment taxes paid by employers. The jobless rate in Florida is 11.9 percent.

“We are sending a message to the business community that Florida is quickly becoming the most business-friendly state in the country,” said state Rep. Doug Holder (R-Sarasota), the sponsor of the Florida bill.

It would go into effect Aug. 1.

In Arkansas, lawmakers are moving toward freezing unemployment benefits levels while trimming the maximum benefit period for state benefits from 26 to 25 weeks.

Update 11:33 a.m.:

Michigan Congressman John Dingell (D) has released a statement condemning Snyder's signing of the new law. In a written statement, Representative Dingell said:

"This law is another in a long string of Republican assaults on working families and unions. In one fell swoop, the Republicans in Lansing have made it so that people in Michigan receive state employment benefits for a shorter period of time than anywhere else in the nation. Michigan does face a budget crisis, but it cannot be solved by declaring war on the unemployed, who - now more than ever - need all the help they can get in order to support their families and find new jobs."

Original Post 10:52 a.m.:

Governor Rick Snyder today signed legislation extending jobless benefits. The law will allow 35,000 Michiganders to receive an addition 20 weeks of federal jobless benefits. Their benefits would have expired April 1st. In a written statement, Snyder says: 

"These benefits are a lifeline for many Michigan families who are struggling in this challenging economy... Cutting them off so abruptly would have jeopardized the well-being of those who are trying hard to find work. Now that we have continued this safety net, we must renew our focus on improving Michigan's economic climate. We will continue driving forward with our job-creating reforms so that fewer people need to rely on unemployment benefits."

Democrats pushed for the extension, but many eventually opposed the final version. The final legislation was amended to reduce the number state jobless benefits from 26 to 20 weeks.

Republicans say reducing the length of state benefits will reduce the burden on state businesses that pay into the state jobless benefits pool. By cutting the number weeks of state jobless benefits,  future unemployed Michiganders will be eligible for fewer weeks of additional federal unemployment benefits.  

According to the state Department of Energy, Labor and Economic Growth, the average unemployed Michigander uses about 19 weeks of jobless benefits. Michigan's unemployment rate declined to 10.4% in February. There were slightly less than a half million people in Michigan without a job who wanted one.  

Michigan's jobless rate is still about 2 percentage points higher than the national average. But the state's jobless rate has been declining since September 2009.

UPDATE 1:24 p.m.:   A spokeswoman for Governor Rick Snyder says the governor expects to sign the bill which would reduce the number of weeks jobless Michiganders will be able to recieve state unemployment benefits. Spokeswoman Sara Wurfel says:

"(The governor's) priority was to ensure no one receiving unemployment benefits was cut off abruptly. It's a lifeline for Michiganders right now - we simply can't risk tens of thousands of Michigan's families immediately losing their benefits in April.  He’s continuing to work tirelessly to help turn around Michigan's economy and create more and better jobs so that we can hopefully reduce the need for unemployment in the first place."

ORIGINAL POST 12:17 p.m.: Democrats are calling on Governor Rick Snyder not to sign legislation that will reduce state unemployment benefits to Michiganders from 26 to 20 weeks. The Republican controlled legislature passed the benefits  cut Wednesday, as part of  a bill to continue extended federal jobless benefits to Michigan’s unemployed.

Royal Oak Congressman Sander Levin says the governor should veto the bill that will eventually reduce benefits for Michigan’s most in need.  

"This is the worst time to do this for Michigan workers.  I think it is reckless.  It’s inexcusable.”

Cutting state benefits will reduce the cost to Michigan businesses that must pay into the unemployment fund.  Cutting state unemployment benefits by 6 weeks could also reduce federal unemployment benefits by up to 16 weeks for jobless Michiganders. The Michigan Chamber of Commerce says the change will save state businesses $300 a year starting in 2012.

Levin says it’s unfair to shorten the period unemployed Michiganders can receive jobless benefits. 

“The governor can say to the legislature 'Get back.  Do what needs to be done here.  And stop the hijacking.'”

Federal jobless benefits for 35,000 unemployed Michiganders will expire April 1st  if Snyder vetoes the bill.

People who file for unemployment benefits next year would be eligible for fewer weeks of payments under a Republican measure approved by the state Senate. The Legislature must approve a jobless benefits package this week in order for the state to receive federal assistance for the program.

Thirty-five thousand Michiganders stand to lose their benefits if the legislature does not agree to the extension by April 1st. 

Democratic state Senator Tupac Hunter says Republicans are using the opportunity to undercut benefits for people who seek the payments in the future.

“This is 100 percent federally funded, we have an opportunity to address that today, and I think that we’ve chosen political games over helping our workers across this great state.”  

Republican state Senator Tom Casperson says the additional benefits would put too much strain on businesses. 

“Putting people into jobs is the way to fix the problem. But we don’t get there when every time we open our mouths we demonize the very job providers that are going to provide the jobs for us. This is trying to offer an opportunity for both sides; a safety net and add to the unemployment, and a fairness to the business people paying the bill.”

The bill was passed and now moves to the state House for final approval.