The Building Tradesman Newspaper

Friday, August 12, 2011

Michigan Republicans lead the way in cutting jobless money

By The Building Tradesman

Gov. Rick Snyder and the Republican-dominated legislature earlier this year have apparently made Michigan a national trendsetter when it comes to whacking worker benefits.

On March 28 Snyder signed a law that reduced permanently reduced jobless benefits in Michigan from 26 weeks to 20 weeks, effective next January with new claimants. Michigan was the first state in history to reduce jobless benefits.

Now, a report released Aug. 3 by the National Employment Law Project (NELP) said nine other states followed Michigan’s lead this year, and many of them, like Michigan, were hardest hit by the Great Recession.

“It’s disconcerting that these lawmakers would expend so much energy making cuts to state unemployment insurance programs when more people are out of work for longer than any other period on record,” said Christine Owens, executive director of NELP. “Rather than adopting responsible financing practices and doing the hard work of fostering job creation, far too many state lawmakers have taken the easy out of cutting workers’ unemployment insurance benefits.” Michigan, Missouri and South Carolina were all among the states cutting most drastically, reducing benefits to 20 weeks.

Jobless claimants in Florida likely now have it the toughest, with potential benefits reduced to as little as 12 weeks. NELP said claimants in Florida must take a 45-question online skills-assessment before they can receive a first payment, and then must provide documentation that they have contacted at least five employers for each week they file for benefits.

NELP’s report identified five states that, despite financing troubles, took the opportunity to cut employer taxes by either canceling or delaying automatic increases that were designed to help states replenish unemployment insurance reserves.

When Snyder signed off on that six-week reduction in benefits, he said a short-term trade-off would allow people currently out of a job to receive up to 20 additional weeks of benefits from a federal jobless program for those who have used up state benefits and most of their federal benefits. Those 20 weeks of federal benefits would have expired for 35,000 Michigan residents on April 1, and then for 150,000 jobless Michiganians by the end of 2011, if Snyder hadn’t signed the bill.

“We will continue driving forward with our job-creating reforms so that fewer people need to rely on unemployment benefits,” Snyder said at the time, without mention of the permanent reduction in six weeks of benefits.

“At a time when U.S. corporations are stockpiling cash, it’s outrageous that state lawmakers have the audacity to make jobless workers pay for decades of irresponsible business tax breaks that ultimately undermined state unemployment insurance finances,” said Owens. “These latest legislative measures were ushered through at the behest of corporate lobbyists, behind closed doors and with no public debate. Sadly, workers will not realize the consequences of these drastic measures until unemployment benefits are no longer there when they need them, by which time it will be too late.”