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$2.9 billion in jobless money is beginning to stink like hell

Date Posted: February 4 2002

"Money is like manure - if you spread it around, it does a lot of good, but if you pile it up in one place, it stinks like hell."
- Texas financier Clint Murchison

The wealth isn't being spread to the growing population of Michigan's jobless workers, who receive a paltry $300 benefit maximum for unemployment compensation - the lowest among states in the Upper Midwest region.

The low benefits and the good economy have helped enable the state's Unemployment Insurance Trust Fund to cut employer taxes for seven straight years - and amass a fund worth $2.9 billion. As recently as Dec. 3, the state Unemployment Agency announced a UI tax cut for Michigan employers worth a total of $200 million.

"We have a very healthy trust," said Unemployment Agency Director Jack Wheatley. "In fact, our fund has one of the largest cash reserves among all of the state UI trust funds in the nation and has enough funds to pay well over two years worth of unemployment benefits."

But the pile of money is starting to stink, and it's beginning to sound as if employer associations think they're entitled to administer the huge stash the way they see fit.

The current Republican plan to increase Unemployment Insurance benefits to $415 per week - while imposing a waiting week for benefits - would cost employers at least $275 million, the Michigan Manufacturers Association estimates.

David Zurvalec, vice president for industrial relations for the association, said, "we're very concerned that we don't see a provision for a waiting week that could offset some of those costs."

Marlene Jobe, executive director of the Employers Unemployment Compensation Council, said, "We'll have to run the numbers on the impact this would have on the UI fund, but at first glance, this proposal is very expensive."

If you're out of work - and a growing segment of Michigan's construction industry is - then that's your money they're talking about, folks. There is no doubt that these employer groups, not the employees, have the ear of Republicans who control the purse strings in Lansing.

Many building trades workers support Republicans on issues like gun rights and less government regulation. But the fact that the GOP has completely ignored the economic needs of jobless workers since 1995, and is pushing for a waiting week in the effort to "increase" jobless benefits, once again illustrates their long history of being pro-business, and anti-worker, when it comes to economic issues.

"A simple $115 UI benefit increase will not jeopardize the fiscal stability of the UI Trust," said Michigan AFL-CIO President Mark Gaffney. "The Unemployment Agency just announced a $200 million dollar UI tax cut for employers - the seventh year in a row that UI taxes for employers have been cut. These tax cuts equal $1.2 billion. If the UI trust fund is healthy enough to allow $1.2 billion in tax cuts for businesses, then the fund is healthy enough to give unemployed workers an extra $115 a week without instituting a waiting week for benefits."