In News Releases

For Immediate Release
May 7, 2020

Contact:
Alex Rossman
arossman@mlpp.org
CELL: 517-775-9053

New report examines problems facing governor and unemployed workers, makes recommendations to improve worker safety net

LANSING—With almost 70,000 new Michigan workers applying for Unemployment Insurance last week—and 1 million workers since March 16—and Gov. Gretchen Whitmer extending and expanding on her executive order last night to do what she can to help them, the COVID-19 crisis has unfortunately made clear just how inadequate the state’s Unemployment Insurance (UI) system has become. A timely new report from the Michigan League for Public Policy examines the shortcomings of Michigan’s current UI system and how decades of inaction and bad policy have eroded UI benefits, and also outlines clear recommendations for improvements.

“With COVID-19 putting unemployment in the spotlight, it’s important to understand the cards that the governor—and Michigan workers—were dealt by the previous administration and Legislature. This system has been broken for a long time, and for years the League has pushed for changes to UI that help workers as the Legislature has made changes that hurt workers,” said Gilda Z. Jacobs, President and CEO of the Michigan League for Public Policy. “We’re glad to see that federal funding and Gov. Whitmer’s executive orders are making a difference during the COVID-19 crisis, but permanent updates to the system have to be made if we want workers and their families to stay healthy when they’re without a job,”

Largely due to longtime Republican opposition in the Legislature and the governor’s office during the Snyder administration, the state’s maximum weekly UI benefit has not been increased since 2002. The current state UI benefit provides unemployed workers with, at most, just 35% of the average weekly wage in Michigan—or $362, which falls well short of federal recommendations. According to the United Way’s ALICE household survival budget, the average single adult in Michigan requires about $405 per week to make ends meet. And the average single parent with an infant needs to make $715 per week to meet the ALICE threshold.

The state’s current benefits aren’t enough to keep a family with two children out of poverty, and the allowance for dependents is only $6, compared to $20 in 1951 after adjusting for inflation.

“Unemployment benefits should cover the basics—rent, utilities, groceries—so that folks can stay afloat. But the numbers don’t add up. The current system will continue to fail hardworking Michiganders if we don’t act, and there is no better time to act than now, as hundreds of thousands of workers are uncertain about the future,” Jacobs said.

The League recommends the following changes

  • Permanently restore the 26-week maximum for Basic UI;
  • Set the maximum weekly UI benefit to 58% of the average weekly wage;
  • Increase the dependents’ allowance from $6 to $20; and
  • Make unemployment protections for self-employed, contract and gig workers permanent.

As the COVID-19 crisis continues to have severe repercussions in Michigan and around the world, the Michigan League for Public Policy has also issued a set of policy recommendations to help keep Michigan residents healthy and economically stable, including one specifically focused on unemployment insurance.

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The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.

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