Nearly one out of every four Michiganders is now dealing with losing their job, but President Trump wants to slash federal support.
MICHIGAN — “You just look out the window and you know things are grim,” said Justin Wolfers, a professor of economics and public policy at the University of Michigan. “The first, second, and third most important things for the economy right now are the progress of the disease.”
For most Michiganders during the pandemic, one of those top three things is employment and making ends meet for their family.
Jobless rates in Michigan had been steadily recovering since the initial upset caused by the novel coronavirus pandemic three months ago. But that pattern broke at the end of June, where new jobless claims rose.
Michigan’s Unemployment Backslide
The week ending June 27 saw 37,312 people file new claims in the state, an increase of 90% from the revised total of 19,641 the week prior, according to data reported by Crain’s Business. Only eight states saw larger claims that week.
“The unemployment system in Michigan is disgustingly broken,” Katie Carls, co-owner of Marvelous Maids, told The ’Gander. “My benefits have again been stopped because they are trying to make sure my claim is not fraudulent. I have provided everything they have asked for, plus some, and am now on week five of no payment.”
Carls refers to a widespread freezing of unemployment accounts in June as the state investigated allegations and suspicion of waste and fraud. In total, over 340,000 unemployment accounts were frozen by the state, and despite validating 41% of accounts within a week, the Unemployment Insurance Agency has been scrambling to deal with the fraud probe’s impact, reports the Detroit News.
Crain’s also reports that the unemployment rate specifically in Detroit is a staggering 45% with no end in sight. These latest unemployment numbers preceded Gov. Gretchen Whitmer’s executive order, which re-suspends indoor service options in bars and restaurants throughout most of lower Michigan. The order comes in response to superspreader events, which The ’Gander reported have been tied to bars.
In keeping with the “dial” approach Gov. Whitmer has applied to the management of the pandemic, Michigan’s recent downturn in terms of mitigating the spread of the virus has slowed the state’s economic reengagement plans. The impact of that on jobless numbers isn’t yet known.
And while the unemployment system is still helping Michiganders, it isn’t doing so reliably.
The UIA has struggled throughout the pandemic, in large part due to a long history of neglect and decay within the agency. As agency director Steve Gray told Deadline Detroit, the pandemic forced the state “to build a plane mid-flight.”
This was a result of Snyder-era policies intended to sure up the state’s unemployment trust fund following the 2008 recession. Deadline Detroit explains that the error-prone MIDAS system Snyder implemented still forms the backbone of UIA’s automated services.
While Deadline Detroit explains the long history of broken unemployment systems in Michigan, there is another timing consideration threatening those struggling with the system. At the end of July, enhancements to the unemployment system made to accommodate the strain the coronavirus placed on the economy start to expire.
Going first: the $600 per week boost that many Michiganders like Carls told The ’Gander they relied on.
Trump Opposes Continuing Enhanced Unemployment
That $600, included in a government relief package enacted in late March, has helped millions of workers stay in their homes and pay bills even as the unemployment rate surged to its highest levels since World War II.
But President Trump has pushed a back-to-work bonus to replace unemployment’s enhancements as part of a broader approach to paint the economy as recovered. Trump took a celebratory tone discussing June jobs numbers.
“Speaking conservatively, more than 20 million Americans are still out of work today,″ Sen. Ron Wyden (D-Oregon) said, “and I bet you’re not celebrating if you’re among the many people who don’t know how they’re going to pay the rent or put food on the table this month.″
Republicans have argued that continuing unemployment enhancements prevent Americans from returning to work, but Wyden said the idea that Americans don’t want to go back to work “is dead wrong and insulting.”
Michigan’s spike in unemployment stands in contrast to Trump’s celebratory tone, and it illustrates that the recession resulting from the coronavirus is far from over.
The Associated Press contributed to this report.