Report: Michigan's unemployment system leaves too many behind

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Temporarily closed unemployment office in Sterling Heights due to COVID-19 shutdown. - MICHAELANTHONYPHOTOS / SHUTTERSTOCK.COM
  • MichaelAnthonyPhotos / Shutterstock.com
  • Temporarily closed unemployment office in Sterling Heights due to COVID-19 shutdown.

A new report found Michigan's unemployment-insurance system lags behind other Midwestern states, by leaving too many workers out and having benefits that are too low.

The report, from the Michigan League for Public Policy, showed the current system disproportionately leaves out Black and Latino workers, with its high eligibility requirements and maximum benefit only a third of the average weekly wage in the state.



Peter Ruark, senior policy analyst at the Michigan League for Public Policy and the report's author, noted many workers of color live in highly-populated communities with fewer jobs available, and more often work part-time and are paid lower wages.

"A lot of lower-paid workers, they simply don't earn enough to qualify for unemployment insurance," Ruark explained. "We need to make Michigan's unemployment insurance system more responsive to the needs of lower-paid workers as well."



He added most people want to find work rather than stay on unemployment, but the system is a crucial stop-gap so workers and their families don't have to face extreme financial hardship while job-searching.

Ruark noted there are 20 bills pending in the Legislature that would bring the unemployment insurance system up to speed in the Midwest, such as increasing the maximum benefit to be 58% of the average weekly wage instead of 33%, as well as increasing the number of weeks people can receive benefits to 26 instead of 20.

He argued reforms would not only help workers and their families, but Michigan's economy as a whole.

"When you have lots of unemployed workers who aren't getting very much in benefits, that means they can't spend as much locally as they did when they had a job," Ruark stressed.

He also supports passing an ABC test, a way to determine who's an employee versus an independent contractor. He noted employers sometimes classify workers as independent contractors to get out of paying into unemployment.

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