Most of what we’ve been writing about Unemployment Insurance in the past 18 months has centered around misguided proposals or legislative inaction that have made it more difficult for laid-off workers to receive benefits as they look for work.

Today, however, there is some good news. The Senate Reforms, Restructuring and Reinventing Committee passed out a bill  introduced by Sen. Bruce Caswell (R-Hillsdale) that would institute a work-sharing program for Unemployment Insurance. Similar bills were introduced several months ago by Sen. Vincent Gregory and Rep. Jim Ananich, who are both Democrats and support the Caswell bill. Work sharing was part of Gov. Rick Snyder’s agenda for workforce development in Michigan, and the League published an op-ed in several Michigan newspapers  urging Michigan to adopt the program.

It’s not hard to see why the idea enjoys support across the political spectrum.

Work sharing, also called short-time compensation, provides an alternative to layoffs for businesses that need to reduce their payroll hours due to reduced demand for their products or services. It allows qualifying employers to reduce the payroll hours of a large pool of employees by 20-40% rather than eliminating some workers altogether. Each employee would be eligible for a proportional percentage of the UI benefits he or she would receive if laid off entirely.

Workers benefit from work sharing because they will have less disruption in their household income than if they were laid off. While UI benefits never replace 100% of lost wages, the wage loss is lower for workers with reduced payroll hours than for those with no payroll hours at all. For some workers, it will mean not getting laid off. For others, it will mean “sharing the sacrifice” through a reduced income so that their coworkers will not be laid off. Workers also benefit because it means they can keep health insurance and other benefits, an important part of minimizing the disruptions to their household economic security.

Employers benefit from work sharing because it enables them to keep their skilled workers rather than having to search for, hire and train new workers when business improves. This reduces unpredictability, administrative costs and training costs.  It can also help maintain positive morale in the workplace, as workers are likely to prefer spreading the sacrifice around rather than fearing the loss of their jobs entirely.

We’ll keep you posted on how this proposal fares in the legislative process.

– Peter Ruark

In Michigan, there were 1.25 million fewer people with employer-sponsored health care in 2010 than there were at the start of the decade. That’s a startling loss — it represents one out of every eight people in our state and about the equivalent of everyone in Oakland County.

The new report from the Economic Policy Institute finds that employer-sponsored health insurance in Michigan declined dramatically between 2000-2001 and 2009-2010. Only California had bigger losses with 1.5 million losing coverage.

It’s not news that Michigan has had a tough economy. Many people are out of work for long periods of time and many want full-time jobs but can only find part-time work. The cumulative impact, however, is astonishing and shows why Michigan needs to push ahead with implementation of the Affordable Care Act.

Senate Bill 693 will implement a Michigan-based health exchange, an online marketplace for individuals and small businesses to purchase affordable health insurance. It has passed the Senate but is on hold in the House.

The report, A decade of declines in employer-sponsored health insurance coverage, also found:

• Michigan dropped from 77 percent of its population covered by employer-sponsored health insurance to 64 percent, the third-largest drop (13 percent) among the states over the decade. Only Indiana (13.6 percent) and South Carolina (13.3 percent) had bigger losses.

• Michigan is still better than average with 64 percent of the under-65 population covered by employer-sponsored insurance compared with 59 percent nationwide. But 14 states have a bigger share of their population enjoying employer-sponsored insurance.

• Michigan ranked 6th in the country for employer-sponsored health insurance in 2000-2001 but 15th in 2009-2010.

– Judy Putnam

One would think a blogger who writes about adult learning and Unemployment Insurance would be enthusiastic about a federal proposal that addresses both. However, what the U.S. House passed Tuesday night was less than thrilling.

It would be nice to report that Michigan’s own Congressman Dave Camp sponsored a bill that makes it easier for unemployed workers without a high school diploma to acquire that credential along with postsecondary training in order to reduce their chances of becoming unemployed in the future.  Nope. Congressional Republicans decided that the best way to help unemployed workers who never finished high school is (drum roll here)…bar them from receiving any unemployment benefits.

Take a deep breath and let’s count the ways that this policy proposal is misguided.

• It punishes people who never finished high school or got a GED, regardless of the reason or their circumstances. Individuals who made that decision years ago, worked hard at a job (or started a business), earned enough to qualify for unemployment benefits and then find themselves unemployed would not be able to access this safety net to provide for their families or prevent foreclosures on their homes.

• It operates on the assumption that skills deficits and other characteristics of workers are driving the unemployment problem, when in fact unemployment is caused by a lack of available jobs.

• It makes assumptions about who is likely to be unemployed and for how long. In fact, as we reported in our Labor Day Report this year, while workers without a high school diploma were more likely to be unemployed than those who completed high school, such unemployed were less likely than those at any other educational level to remain unemployed for more than half a year.

• It doesn’t have a clear purpose. Is barring workers without a high school diploma or GED intended to encourage them to go back to school and acquire one? If so, there are no provisions in the bill to help with that. Is the goal to reduce the cost of Unemployment Insurance by attacking those most likely to need it? If so, it will not make a big difference, since workers without a diploma who earn low wages usually cannot qualify for benefits anyway.

• Finally, it creates a terrible precedent by introducing eligibility standards on the federal level that have nothing to do with the hours or weeks of employment or wages earned prior to losing one’s job. No other federal eligibility requirement is based on personal characteristics of a worker that have nothing to do with the worker’s employment.

In a worst-case scenario, such a policy could encourage employers to favor applicants without a high school diploma over those that possess one, and could even create a perverse incentive for employers to encourage high school dropout. Along with stigmatizing a population that many states are trying to help, this policy could work directly against workforce development efforts.

The proposal is, in a word, pointless.

– Peter Ruark

From the First Tuesday newsletter. Sign up here.

As 2011 draws to a close, it’s a good time for reflection. Unfortunately, 2011 was another difficult year for families in Michigan, and we know that policy decisions turned the clock backward.

To paint the 2011 picture for you, I’ve developed a matching game. See if you can connect the answers to questions about child and family well-being.

A. Michiganders who are food insecure
B. Economic activity generated by  $1 of food assistance
C. Rise in childhood poverty since 2000
D. Kids on free or reduced lunch 
E. Unemployment rate 
F. Average age of a child receiving cash assistance
G. Number of children statewide slated to lose cash assistance
H. Tax cut to businesses
I. Amount per person, per day on cash assistance (welfare)
J. Average number of months a family is on welfare
K. Number of weeks unemployment insurance was reduced
L. Percent of people who qualify for Medicaid

1. 64%
2. 10.6%
3. One out of seven
4. 29,700
5. $1.79
6. 83%
7. 14.9
8. Six
9. One in five
10. $5
11. 7 years old
12. 50%

Key: (A-3, B-5, C-1, D-12, E-2, F-11, G-4, H-6, I-10, J-7, K-8, L-9)

The numbers tell the story and there are no winners in our game. We hope that you will help us tell the story by donating to the League. Our research, data, and advocacy have never been needed more.

Please give generously by clicking on our Donate button and have a joyous holiday season.

– Gilda Z. Jacobs

On Thursday we heard Gov. Rick Snyder outline his workforce development agenda for the state of Michigan. He said several things that sparked our interest here at the League, mostly positive.

Without outlining any policy positions, the governor stressed the need to address factors that contribute to what he termed “structural unemployment,” which is generally understood as unemployment resulting from the mismatch of the demands of the labor market and the ability of workers to meet those demands. Normally this is attributed to lack of needed skills on the part of workers, but the governor  –  in addition to this — also cited child care and transportation barriers. We have for many years urged the state to make a serious effort to address these barriers as well as skills deficits among low-wage workers.

Gov. Snyder also mentioned “tying workforce development funds to meaningful workforce measures” through a data-sharing system. As we have written before, data is power; we cannot adequately measure how well programs are working without collecting and aggregating meaningful data with which to measure success. We hope the governor intends the system to collect data on the persistence and success of students who go through basic skills programs (such as adult education and community colleges remedial/developmental education) in addition to data on occupational training programs that lead directly to employment. (See the paper The Key Ingredient: Data is Crucial to Building Michigan’s Workforce System.)

One solid policy change proposal in the speech was to end the current Michigan Works! Agency policy that jobseekers seek services from only the one-stop centers in their designated Michigan Works! region. This sometimes creates difficulty for individuals who live closer to a center outside their region. The  governor urged a new policy requiring every Michigan Works! Agency door to be open to every eligible person who seeks assistance.

We applaud the governor for supporting work sharing in his address. In a recent Unemployment Insurance paper we published, Falling Short: Michigan’s Unemployment Insurance Compares Poorly with Other Midwestern States, we recommended that Michigan implement a work-sharing program that would enable qualifying employers in difficult circumstances to avert layoffs by spreading the pain more broadly but not as deeply — reducing the hours of many employees and making up the wage difference with UI benefits instead of laying off a few employees entirely. There is a bill currently in the House that would create a work-sharing program (House Bill 4516), and the governor included this in his plan.

We do wish Gov. Snyder had called for restoring the six weeks of UI benefits that the Legislature cut earlier this year, however. Unemployment may have gone down slightly in recent months, but Michigan still has a long way to go and his support for raising the maximum weeks of state-funded benefits back up to 26 would go a long way toward enabling it to happen.

– Peter Ruark

December 5th, 2011 Posted to Blog: Factually Speaking,Workforce Development | Comments (1)

For nearly two years, we’ve been blogging about the various policies governing Michigan’s Unemployment Insurance system and their effects on the unemployed workers who need the benefits as they look for work.

Some of the blog entries have focused on federal legislation, such as the game of chicken that Congress played more than once by renewing benefit extensions at the last minute before expiration. Others, however, have been about ill-advised decisions by the Michigan Legislature during the past year: 1) cutting the maximum number of state-funded UI weeks from 26 to 20, and 2) letting $139 million in federal dollars for the state UI trust fund float by rather than make modernizations that would expand UI eligibility to cover more workers.

To our list of questionable state policies, we can add keeping the maximum benefit at a flat $362 per week instead of pegging it to the average wage, and maintaining high earnings requirements for eligibility that prevent low-wage workers from accessing benefits.

Such state policies have resulted in Michigan being last in the Midwest on four indicators of worker-friendly UI systems, according to a new paper by the League. Of eight Midwestern states, Michigan pays the lowest maximum benefit (leading to a comparatively low average weekly benefit), has the lowest level of UI coverage (making Michigan workers the least likely in the Midwest to qualify for UI), spends the least amount per unemployed worker, and allows the fewest weeks of state-funded benefits. All this while its unemployment rate is highest among the Midwestern states.

The paper recommends that the Michigan Legislature reverse its new law cutting state benefits to 20 weeks and refrain from passing further UI legislation that is anti-worker. It also recommends making the maximum benefit a percentage of the state average weekly wage rather than keeping it at a flat rate, and adjusting the earnings requirements so that more low-wage workers can be eligible.

Finally, the paper encourages Michigan to implement the modernizations that would expand eligibility, even though the federal money is no longer available. It also encourages Michigan to explore the idea of adopting a work-sharing program, in which qualifying businesses could arrange with the state to cut hours of many employees rather than laying off a few, and have UI make up a portion of the lost wages.

Michigan is not going to be out of this economic hole anytime soon, and in the meantime it would do well to strengthen its worker safety net to at least be on par with its Midwestern neighbors.

– Peter Ruark

With rising fuel prices and new cuts in energy assistance, many seniors and low-income residents of the state will be paying more to keep their homes warm in the months ahead.

For years the federally funded Low-Income Heating Energy Assistance Program and the state funded Low Income and Energy Efficiency Fund have helped Michiganders living below 60 percent to 75 percent of the state’s median income—about $3,600 a month for a family of four—pay their utilities. Energy assistance from these funds benefited more than 600,000 households in Michigan in 2010. But this fall, there have been drastic cuts in both LIHEAP and LIEEF, and there are more cuts to come. Michigan already suffers from poverty and unemployment rates well above the national average, and cuts like these will affect residents already struggling in these difficult times.

Last year, LIHEAP and LIEEF paid out over $284 million to help seniors and low-income residents of the state with their utility bills. But LIHEAP funds have already been cut 10 percent in 2011, and the president’s 2012 budget calls for an additional 44 percent cut to the fund. This is intended to bring LIHEAP funding back to 2008 levels, but in real terms, after adjusting for inflation and rising fuel costs, a cut of this magnitude turns the clock back much further. 

To add insult to injury, a state appeals court struck down the financing structure for LIEEF in July 2011. Through grants local agencies such as the Salvation Army and the Michigan Heat and Warmth Fund, LIEEF has historically helped those in need keep the heat on through the winter. But already, many LIEEF grantees like THAW have come up short on cash, and soon they will be unable to meet the demand for assistance.    

Even though the fund still exists and energy companies continue to pay into it, the court ruled that the Michigan Public Service Commission no longer had the authority to utilize these funds. State Rep. Ellen Lipton, D-Huntington Woods, introduced HB 5008 in late September, which would enable the MPSC to once more make use of LIEEF funds. The Michigan League for Human Services testified in support of the bill at a hearing today. Unfortunately, no vote was taken on the legislation, which would provide a long-term solution to LIEFF funding.

Winter is at our doorstep, and the LIEEF financing structure already lapsed on Oct. 1.  Lawmakers have yet to introduce any short-term solutions, such as fixes proposed by the Coalition to Keep Michigan Warm, which might help tide families over as the nights turn cold.    

It is true that there are state laws that make it more difficult for utility companies to shut off heat for customers enrolled in state assistance programs from Nov. 1 to March 30 of each year.  But, it is a myth that this protection is absolute.  The energy company can turn off your heat if you don’t pay your bill or default on your agreement.  If a customer’s heat is shut off before Nov. 1, utility companies are under no obligation to turn the heat back on for the winter, and even if their heat is not turned off, there are no measures to protect customers from being hit with a large bill and the threat of shut off on April 1.

Certainly, energy assistance helps protect Michigan’s most vulnerable—almost all households receiving LIHEAP or LIEEF funds include someone over 60, a member with a disability, or a child under 6.  But, this isn’t just about doing what’s right; it’s also fiscally responsible.  Many families who live above the poverty line but below 60 percent of median income in Michigan rely on subsidies like the Home Heating Credit to keep them out of poverty.  This is especially true for families struggling with short-term joblessness.  Families in this income bracket tend to spend about 16 percent of their monthly expenditures on utilities compared to the national average of about 7 percent.

Helping these families stay out of poverty doesn’t just save the state the cost of having to add them to its welfare rolls; it also promotes spending. Moody’s Analytics, one of the country’s leading economic research firms, reports that from 2009-2010 every $1 spent on LIHEAP generated $1.13 in economic activity, helping lift America out of the Great Recession. Energy assistance is an important component of Michigan’s economic recovery, and the state needs LIHEAP and LIEEF to help Michigan families get back on their feet.

Cutting these funds now makes life harder for hundreds of thousands of families.

– Taylor Long

Here we go again. Congress is once more balking at extending the lifeline to unemployed workers and their families as they look for work.

In Michigan, inaction by Congress would mean 66,700 unemployed workers would lose access to Unemployment Insurance benefits, according to a new paper by the National Employment Law Project called Hanging On By a Thread.

Normally, states only offer their unemployed workers Basic UI, which is funded by the state and federal taxes collected from employers. In most states, Basic UI is available for up to 26 weeks; however, Michigan’s Legislature, displaying insensitivity to the very real economic hardship in this state, cut that maximum down to 20 weeks.

In states in which the unemployment level is especially high, states can provide Extended Benefits for 13 or 20 weeks (depending on the level of unemployment) to workers who have exhausted their Basic UI, with the cost split between the federal government and the state. The 2009 American Recovery and Reinvestment Act, however, incentivized qualifying states to offer Extended Benefits by making them entirely federally funded.

In July 2008, the federal government responded to the extraordinarily high unemployment rate by offering what is call Emergency Unemployment Compensation (EUC), which is also entirely federally funded. EUC offers 34-53 additional weeks of UI benefits, in four tiers, to states with very high unemployment rates. Because Michigan had a very high unemployment rate, long-term unemployed workers in this state could collect the maximum number of benefits from both Extended Benefits and EUC, in addition to Basic UI — a total of 99 weeks for workers who, despite looking for work for nearly two years, could still not find employment.

All of the federally funded EB and EUC benefits are set to expire at the end of the year if Congress does nothing.

In that case, in Michigan, 20,800 long-term unemployed workers will face an immediate cutoff from their Extended Benefits, an additional 26,100 workers will lose their EUC benefits after they complete their current tier, and 19,800 workers will only be allowed to complete their 20 weeks of Basic UI.

As the paper points out, never in the history of the UI program has the federal government let federally funded unemployment benefits expire when the unemployment level is so high. This certainly is not what Michigan needs now.

There is a petition that you can sign to let Congress know unemployed workers need them to renew the federal UI benefits now.

– Peter Ruark

As a lifelong Metro Detroiter, it’s heart-breaking to see the latest poverty statistics for our already troubled region.

Among the country’s 50 largest cities, Detroit has the dubious distinction of having the largest share of children living in poverty or in low-income families.
Four out of every five kids in Detroit lived at less than 200 percent of poverty — the level many experts consider necessary to cover the most basic needs, according to KIDS COUNT.

Statewide, one in every four kids lives in poverty. Overall the poverty rate is nearly 17 percent with the rate for African Americans double that – nearly 34 percent.
As troubling as the poverty numbers are, they don’t show the full picture of families struggling to make ends meet. The Census Bureau considers a family of four to be living in poverty if its income is below $22,314, but most studies suggest families need at least twice that to pay their bills.

Today, one in nine workers in Michigan, and one out of 11 nationally, are unemployed. Nationally, 6 million workers –- that’s how many total people live in Wisconsin plus the Upper Peninsula –-  have been out of work for at least six months. These workers have spent their savings and many have exhausted their unemployment benefits.

Poverty and unemployment also have longer term consequences. Unemployed workers lose critical job skills. Poor children’s health and development suffers, and they do worse in school, threatening their ability to become productive workers as adults. Seniors in poverty can’t afford the health care they need to stay strong and independent. 

By 2018, our country will have 3 million fewer new workers with bachelor’s or associate’s degrees than it will need. That limits our capacity for sustained economic growth and harms us all.

It doesn’t have to be this way. We know how to help people through hard times and prepare for a stronger economic future. For example, the availability of public health insurance meant that while the number of people with private health insurance fell this year, the share of Americans who are uninsured did not grow.

President Obama’s jobs package is a step in the right direction to reduce the number of people falling out of the middle class and build a stable, strong economy. Attempts to reduce the deficit through cuts in health care or other essential services are bound to fail because they will reduce jobs, cripple economic activity, and shrink tax revenues.

Right now we face a triple threat. Rising poverty creates more demand for critical services, just when states and the federal government have cut services. Here in Michigan we have already cut education, public safety and safety net programs.  Now Congress is considering additional cuts, which is exactly the wrong choice.
We need our leaders to have the courage to make the right choices. 

A congressional  “supercommittee” is developing a plan to reduce our federal deficit. The surest way to reduce the deficit is to get people back to work and paying taxes. The “supercommittee” should develop a plan that creates jobs and continues unemployment insurance. It should ask millionaires and profit-rich corporations to pay their share in taxes and cut expensive contracts and other waste in our defense budget. 

Our country and our state cannot thrive when so many people are struggling.  We must act now.

– Gilda Z. Jacobs

Kids across Michigan today are lining up for school buses, breaking open those new packages of Crayolas and settling in for storytime.

The first day of school is thrilling and we want all of our children to partake in the promise and excitement that a new school year brings.

But for children living in poverty there are economic problems that can disrupt that good start to the school year.

Sometimes people tell stories, and sometimes data tells the story. Let’s look at the story that begins this school year. Once upon a time . . .

• The national KIDS COUNT Data Book (pdf), while showing some improvements, ranks Michigan 36th for babies born too small, which elevates their risk of chronic disease, developmental delay and even death. (This could cost us more down the road.)

• More than half of Michigan’s unemployed adults of prime working age (25-54) last year spent a half year or longer looking for jobs (pdf) — the longest on record. Unemployment hovers around 11 percent, much worse in rural and urban areas. (The legislative response was to pass a 48-month, retroactive limit on cash assistance, making Michigan the harshest in the Midwest and to reduce unemployment insurance from 26 weeks to 20 weeks.)

• The 48-month limit is expected to impact more than 11,000 families with nearly 30,000 children. The average age of a child on the Family Independence Program caseload is 7. (At a time when a second-grader should be learning to read, he or she may be forced to move and be uprooted from their school come Oct. 1.)

• Child poverty is up 64 percent in our state (pdf) over the last decade at a time when we want to improve the business climate. (Poor kids usually grow up to be poor adults-not a good training ground for the new economy or something that attracts potential employers to our state.)

When my kids were little, I read to them from a series of books where they could choose their own ending. We can do the same thing now by changing policies that will have a more positive impact today, as well as into the future. My story book would have the following policy changes:

• Restore unemployment benefits to 26 weeks
• Continue and enhance our investment in early childhood programs
• Return the state Earned Income Tax Credit to 20 percent
• Increase investment in adult basic learning skills, community colleges, and higher education
• Improve women’s access to health care
• Enhance maternal and infant health in communities of color, as well as eliminating the disparities in unemployment
• Provide more robust family support services to at-risk families
•Create a workforce development plan that is inclusive of all workers, including low-skill workers

Our policymakers face a great challenge, but I am convinced that they can truly create a happy ending for the kids and their parents in our state by making targeted investments now.  Our families need changes that will help them today, rather than waiting for a fairy godmother to show up down the road.

– Gilda Z. Jacobs

September 6th, 2011 Posted to Blog: Factually Speaking,Events,Health Care,Human Services,Kids Count | Comments (1)