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Finally - modest increase Ok'd for unemployment insurance

Date Posted: April 26 2002

LANSING - It's a sign of the conservative times in our state capital that even in an election year, it was a mighty struggle for Republicans to do the bare minimum to help Michigan's unemployed workers.

The state's jobless workers who receive the maximum benefit will soon be getting a $62 weekly boost in their Unemployment Insurance checks, but the raises are smaller than originally proposed and took nearly five months to become reality.

"While we still believe that this legislature could have done more for working families, the latest plan removed the most onerous provisions from the previous bills," said Senate Democratic Leader John Cherry (D-Clio). "I am proud that Democrats and organized labor stopped the Chamber of Commerce plan which would have penalized unemployed workers."

To organized labor, the most onerous provision that was removed during the legislative process was a waiting week for benefits. Instituting a waiting week would have actually resulted in a reduction in benefits for short-term jobless workers.

Since 1995, Michigan's unemployed have received a maximum benefit of $300. That amount is the lowest among states in the Great Lakes region and has not budged over the last seven years because of inaction by Republican legislators.

State Republicans, who control all three branches of state government, decided in January to raise the unemployment benefit. The first proposal seemed too good to be true, and it was: it included an increase of $415 per week, but included the waiting week. All manner of negotiations ensued, with the Michigan Chamber of Commerce adamant about keeping the waiting week, with organized labor insisting that it be removed, and with conservative Republicans insistent that the initial proposed raise to $415 per week was too costly.

In the end, the bill that was signed by Gov. Engler, raises the maximum benefit by $65, eliminates the waiting week, and also increases the duration of the benefits formula that determines how long a laid off worker will receive benefits. This ensures that
workers receiving an increased benefit won't receive benefits for a shorter period of time.

Where did the amount of the $65 increase originate? One Republican leader said it amounts to increases in the inflation rate since 1995.

Democrats remain critical of several elements within the legislation. The final plan offers no increase to people who made less than $30,000 per year prior to becoming unemployed - 40 percent of Michigan's jobless.

"We waited weeks longer than was necessary and ultimately passed a plan that doesn't help more than 40% of those receiving benefits," said Cherry. "But at least we were able to help some of those who are struggling to provide for their families."

The bill also includes a number of new benefit eligibility restrictions. Workers who receive severance pay will have their unemployment benefits reduced. The reduction does not apply to Supplemental Unemployment Benefit (SUB) pay to autoworkers. There is a heightened burden of proof on workers to show that it's the employer's fault that they were let go from their job. And, idled workers would have to move quicker on taking jobs that become available, even lower-paying ones, or lose their benefits.

"There's still work to be done to make sure that every unemployed worker gets a benefit increase," said Michigan AFL-CIO President Mark Gaffney. "We shouldn't have to wait until next year to finish the job. I call on the legislature to get back to work on this issue before they take their summer vacation."