500,000-plus jobless Michigan workers brace to lose unemployment benefits

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More than a half-million unemployed Michigan residents are preparing to lose all or part of their jobless benefits at the end of next week when federal pandemic-related unemployment programs expire.

The transition will leave fewer than 100,000 state residents receiving jobless benefits in September, down from a record 2.1 million people in April 2020.

Michigan’s Unemployment Insurance Agency this week notified everyone with active claims to expect the reduction — including the $300 per week enhanced benefit that was included with all payments since March — along with information on how to access job search tools.

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“These federal programs provided much-needed financial relief to those who experienced job losses as a result of the pandemic,” said Liza Estlund Olson, acting UIA director, in a statement. 

Now, she said, the focus is on resolving outstanding issues at UIA and scaling back department operations as the number of people receiving benefits decreases as of the week ending September 4.

“We want to work through any backlogs that we have,” she said Wednesday during a press conference.  “We want to make sure that we’re taking care of all of the people who we need to take care of.”

Based on the most recent data from the U.S. Department of Labor as of the end of July, the changes in Michigan’s unemployment will affect: 

• About 312,000 people receiving Pandemic Unemployment Assistance. PUA is for  workers who are not ordinarily eligible for state unemployment benefits, such as self-employed, independent contractors and gig workers.
• About 185,000 people receiving Pandemic Emergency Unemployment Compensation. PEUC allows up to 53 weeks of extended benefits after someone exhausts their regular state claim. 

In addition, an estimated 95,000 people receiving regular benefits will lose the $300 weekly supplement, known as Pandemic Unemployment Compensation.

Business leaders say employers hope to welcome many of the jobless workers back into the workforce. Some state legislators had hoped to end the $300 enhanced benefits three month early, saying in June that employers needed them back and that the payments provided a disincentive to seek work.

Michigan’s labor force declined by about 236,350 in July when compared to July 2019, before the pandemic, according to federal data.

And among the people who are working, 252,310 fewer jobs were filled over that same time frame. Employers across the U.S. have said this year that they’re struggling to hire enough workers as businesses fully reopen following pandemic restrictions. 

“People who are on unemployment are not going to have a hard time finding work that pays as much or more than unemployment,” said Brian Calley, president of the Small Business Association of Michigan. 

“The work is there,” Calley said. “Lack of jobs will not be the problem.”

At the same time, advocates for low-income Michigan residents worry about what the change will mean for many of them, especially workers who are not able to return to work due to health issues, concerns about COVID-19 and the delta variant, child care issues, and for gig workers whose industries have not rebounded.

“There are not enough safety nets in place,” said Lisa Ruby, public benefits law attorney with the Michigan Poverty Law Center. 

“Workers and their families will suffer both housing and food insecurity,” she said. “This will impact health, and the ability of children to engage in school, especially during this time when they are returning, for the most part, to in-person learning.”

The change in unemployment will affect the state agency administering them, too. 

Complaints about UIA have dogged it since the start of the pandemic, as people went unpaid while overwhelmed staff struggled to adapt its controversial computer system to the dramatically higher volume of filers. Wide-scale fraud attempts, slow payments, difficulty resolving concerns and the resignation of the agency director all feed what state Rep. Steve Johnson, R-Wayland, speaking at a recent House Oversight Committee meeting, called “a pattern of incompetence and mismanagement”.

Olson defended her department during a call with reporters Wednesday.

“Come walk a day in my shoes,” she said. “And in everybody else who works in this agency’s shoes who are trying to get this work done and totally and completely understand that our mission is to pay eligible claimants the benefits they are due.

“We do that every day.”

But the number of people doing that work within UIA will decline as outstanding cases are resolved. About 20,000 people who have filed what the state calls “potentially eligible” claims have received no benefits, and Olson said the agency was unable to say when those people will hear a determination of benefits. 

After September 4, about 1,500 contract staff will leave the UIA, Olson said, with the limited-term staff assigned to UIA from other departments — just under 500 people — departing next. That will leave 650 permanent staff, she said.

Olson advised people who’ve made UIA claims to keep an eye on their accounts for up to a year, due to the length of time it can take to resolve appeals and other pending issues. 

That also will give them access to information “in case there are additional issues with their claim,” Olson said, noting that various reviews could result in money owed to them.

“We still have work that we’re doing for the people who are currently there,” Olson said,

Meanwhile, she stressed, people with questions and concerns about their benefits should continue to make appointments for online and in-person visits, as those will remain available.

Michigan’s unemployment system has processed 3.39 million claims since the pandemic began in March 2020, resulting in payouts totaling $38.3 billion. 

Much of that funding came first from the $2 trillion CARES Act, which expanded unemployment eligibility in April 2020 in the weeks after the pandemic first hit, including $600 per week extra payments that were made through July 2020. Those payments, plus one-time stimulus checks based on income, were credited with bolstering the state’s economy as many businesses faced restrictions during the pandemic and unemployment soared.

Since then, federal programs like PUA were extended through September 6 by President Joseph Biden as part of the $1.9 trillion American Rescue Plan approved in March. (Because of Michigan’s unemployment calendar, the state’s benefits end on Saturday, September 4.)

As of July, the average weekly benefit amount was $214 for people receiving PUA benefits and $329 for regular state unemployment benefits.

The end of the federal benefits program means that jobless Michigan workers as a group will receive an estimated $283 million less per week, based on the jobless worker data from the Department of Labor.

Calley said much of that money that has been circulating in the economy will be made up as jobs are filled.

“I don’t think we should expect that the unemployment payments will be replaced dollar for dollar immediately, because people will enter the workforce in stages,” he said. “But this will be income tied to productivity … as opposed to borrowed dollars.

“That’s more sustainable.”

The bulk of state residents receiving benefits from all funding categories are in southeast Michigan population centers, according to UIA data. That includes Wayne County (183,700), Oakland County (63,000) and Macomb County (61,000). Other counties with high numbers include Genesee County (33,000) and Kent County (27,800). 

Stephanie Beckhorn, director of the Michigan Department of Labor and Economic Opportunity’s Office of Employment and Training, said the state has at least 90,000 jobs available on its MI Talent Connect website. She encourages workers struggling to return to the workforce to contact a local Michigan Works! service center for help with resumes and finding resources with child care and transportation, among other needs.

Many of the resources are free, Beckhorn said. 

Also expiring on September 4 is the Mixed Earners Unemployment Compensation, which provides an additional $100 per week to claimants who have earned at least $5,000 in net self-employment income. This affects 92 people, according to UIA.