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Michigan Senate panel votes to extend, increase unemployment benefits

Pabio December 6, 2024

Lansing — A Michigan Senate committee introduced a bill Thursday that would extend by six weeks the maximum time people can collect unemployment insurance benefits and increase the cap on payments, set more than 20 years ago.

The Democratic-led Senate Labor Committee voted 3-1 along party lines to send the proposal to the full Senate with 26 days left in the term. Next year, Republicans will take control of the State House, breaking Democrats’ hold on power in Lansing.

Sen. Paul Wojno, D-Warren, the lead sponsor of the unemployment billargued that Michigan lagged behind neighboring states in providing benefits to people who lost their jobs.

“Michigan is the lowest in the Great Lakes region for unemployment benefits and the only one at 20 weeks,” Wojno said during Thursday’s committee meeting.

Under his bill, the maximum length of time a person could receive unemployment benefits would increase from 20 weeks to 26 weeks. In 2011, Republican then governor. Rick Snyder signed a measure in a law which reduces the maximum weekly duration from 26 weeks to 20 weeks.

Wojno also said a revised version of his bill would increase the weekly benefit cap from $362 to $614 over a three-year period. The cap would increase by $84 each year starting in 2025, Wojno said.

When fully implemented, the proposal would increase the maximum amount of weekly unemployment benefits by nearly 70 percent.

Likewise, the bill would increase the cap on the benefit unemployed workers can receive for each of their dependents from $6 to $26 over the same three-year period, Wojno said.

Sen. Thomas Albert, R-Lowell, the only Republican on the Senate Labor Committee, criticized the bill, saying the impacts would hit employers who fund the unemployment system and that the changes would mean employees would not benefit higher wages and benefits.

Albert asked Wojno what the financial implications of the changes would be.

“I don’t have those numbers,” Wojno replied. “It all depends on who is going to apply for unemployment and how the economy is going at that time.”

In October, Michigan had a seasonally adjusted unemployment rate of 4.7%, according to the Federal Bureau of Labor Statistics.

The nonpartisan Senate Fiscal Agency said the six-week extension of benefits alone would have increased the total amount of payments over the past year in Michigan by $76.3 million, to 104 .5 million dollars. The total amount of payments over the last year was $763.1 million, the agency said.

“These assumptions are based on current trends in the number of claimants, the amount of compensation and the current exhaustion rate,” the agency noted. “In times of economic downturn with fewer job opportunities, the burnout rate would likely be higher than the current rate.”

Many labor groups came out in favor of the Senate bill Thursday, while business advocacy organizations said they were opposed.

Amanda Fisher, state director of the National Federation of Independent Business, testified in her opposition, saying lawmakers reduced the maximum duration of benefits by 26 weeks in 2011 because the unemployment system was declining. in a financial hole.

“A big concern is that this benefit increase goes too far, too fast and could put us at risk again in an economic downturn,” Fisher said.

The proposed changes will result in staff and salary reductions as well as higher prices, Fisher told the committee.

But Sen. Darrin Camilleri, a Trenton Democrat, noted that the $362 weekly cap on benefits hasn’t changed since 2003, 21 years ago, even though property prices have surged during that time.

“How much have the companies that work with you increased their prices since 2003?” Camilleri asked Fisher.

Labor Committee Chairman John Cherry, D-Flint, said the $362 cap is the lowest in the Midwest. As for the percentage of the average weekly wage covered by the amount, Cherry said it is 28% in Michigan, but benefit caps in other Midwest states are at least 40% of their average weekly wage.

“That’s a fact I’m not going to disagree with you with,” Fisher said. “But that doesn’t mean we’re in favor of increasing it.”

In Ohio, the maximum weekly unemployment benefit for someone with no dependents is $583, according to that state’s Department of Job and Family Services. In 2020, Governor Gretchen Whitmer declared that 40 states, including all of Michigan’s neighbors, automatically provided at least 26 weeks of unemployment benefit.

Steve Claywell, president of the Michigan Building and Construction Trades Council, said current unemployment benefits are not enough to fund a life in the state. Workers can go to other states and get six more weeks of benefits and extra money, he said.

“Our members should not have to choose between foreclosure, food, family or life in Michigan,” Claywell told the committee. “Because our members are leaving.”

It was unclear Thursday whether the full Senate would pass the bill. However, the proposal would need to pass the Senate, House and get the governor’s signature to become law.

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