Unemployment rate’s untold stories

September 3, 2010
Peter Ruark photo

Peter Ruark

It’s Labor Day once again, and as Harry scurries about getting things ready for his annual family cookout, he tries to squeeze in a few moments of reflection on the state of labor in Michigan.

He brings this year’s Labor Day Report from the Michigan League for Human Services out onto the deck, and reads that Michigan has had the highest unemployment rate in the nation for 49 out of the past 52 months, and that the current unemployment rate is still more than 13 percent.

As he waits for the coals in the grill to heat up, he skims and realizes that 41 percent of Michigan’s unemployed workers—and nearly 50 percent of African American unemployed workers—have been unemployed for six months or longer.

Harry sips a Michigan brew and puts the meat on the grill, thinking about his friends and neighbors who were laid off, but were lucky enough to not be unemployed. The guy at church who got his hours cut to part time kept his job, to be sure, but has sure had a helluva time paying the mortgage.

He reads in the Labor Day Report that one-fourth of all part-time workers last year wanted to work full time but could not because of the economy. The unemployment rate doesn’t include these people like his church friend.

Harry thinks of his neighbors. One lost her job last year because the shop where she worked went out of business. She tried for the next several months to find another job, and finally gave up in frustration. She now stays home and volunteers at her children’s school, but hopes to look for work again in the future when the job market is friendlier.

Then there is the single mother across the street who had to stop working because she no longer has reliable evening child care, and the only jobs she can find are during the evening. She applied for public assistance, which is now her only means of support for her family. She uses this downtime to get some training at the local community college, so that when the economy gets better she will be able to find solid daytime work. Neither of these neighbors is counted in the unemployment rate.

The relatives finally arrive for the picnic, and Harry’s niece tells him how she lost her manager position at the box store and now works for a fast food chain earning only one-third of her former wages.  Harry shows her the Labor Day Report and tells her that her wages would not bring her family out of poverty.

She is glad that her husband has not lost his job, but is worried that if he does, she would not be able to support her husband and young daughter on her fast-food wages alone.  She is also not counted in the unemployment rate.

As folks eat their lunch and socialize, Harry’s brother mentions that he hopes next year’s Labor Day Report shows a decrease in long-term unemployment and in the share of workers who are part time for economic reasons. His aunt points out that the end of the report lists some things that Michigan could do better to support workers and their families, such as increasing funding for adult education and vocational training, modernizing the Unemployment Insurance system, and strengthening Michigan’s social safety net for those who don’t qualify for unemployment benefits.

Finally, sensing the conversation is going to turn to MSU’s  opening football game, Harry reminds everyone that we live in a representative democracy and that people might want to consider calling their state legislators to urge them to take action on some of these issues.

— Peter Ruark


It’s only a start

July 21, 2010

Peter Ruark

We can celebrate. Yesterday, the U.S. Senate voted to override a filibuster blocking a bill that continues making Emergency Unemployment Compensation available for workers who have exhausted their Unemployment Insurance (UI) but have still not found a job. This vote will prevent more than 130,000 Michigan workers from prematurely losing their UI benefits. 

However, the vote does not restore the Federal Additional Compensation (FAC) that added $25 per week to the UI benefits for Michigan workers. This additional money has helped unemployed families fill their gas tanks, pay their utilities and buy household necessities, and by the end of May 2010 added $669 million to Michigan’s economy.

Michigan’s average UI benefit during this past April would normally have been $301 per week, but with the FAC it was $326 per week. The maximum weekly benefit in Michigan has been $387 as opposed to $362 without the additional compensation. 

The vote also does not include the Consolidated Omnibus Budget Reconciliation Act (COBRA) subsidy for health insurance for laid-off workers. This assistance helped roughly 83,000 Michigan households between the beginning of 2009 and the first few months of 2010.

Without the subsidy, many unemployed workers will see steep increases in their health insurance costs.

Two sources of federal aid to states to help with public assistance costs have also not been extended yet. One is the enhanced Federal Medical Assistance Percentages, which provided additional match dollars to help states pay for their Medicaid programs. The other is the Temporary Assistance for Needy Families (TANF) Emergency Fund, which provides federal dollars to temporarily subsidize jobs for people who are leaving (or are in danger of having to seek) public cash assistance. According to the Center for Law and Social Policy, this program could create nearly 200,000 jobs nationally by September, at which time it will expire at the end of September if Congress does not renew its funding.

So, we can uncork the champagne and celebrate the fact that Congress finally voted to allow long-term unemployed workers to continue receiving unemployment insurance benefits. But Congress still needs to continue the COBRA subsidy, the enhanced federal Medicaid match, and the job creation subsidies. And it would be nice if our unemployed workers could have that extra $25 per week of help as they look for other employment.

— Peter Ruark


Penny Swan on being jobless

July 16, 2010

Judy Putnam

Penny Swan, 51, is an out-of-work respiratory technician in Hillsdale.

She’s one of the 104,000 jobless Michigan workers who, as of Saturday, will have lost their unemployment benefits this month after Congress failed to pass an extension. Swan found out she was eligible for 20 more weeks of unemployment, then a week later she got a letter saying it wouldn’t happen. Her benefits ended two weeks ago.

“It’s just wrong,’’ says Swan, who has been looking for work for 18 months. “It’s not only affecting me, it’s affecting everyone I pay bills to.’’

Swan says she hears the talk show chatter about people who say the jobless need to just get off their couches and get to work. It’s hard for her to hear because she spends long days sending out resumes and looking for work. She wants to work but is running into brick walls.

“I’m not getting any calls back. I’ve never experienced anything like this. Before this, I’ve never been out of work for more than two weeks,’’ she says.

Swan’s life has been caught up in the national debate about debt vs. economic stimulus. Some in Washington have suddenly discovered the national debt. While it is a concern (See a recent Center on Budget and Policy Priorities paper on the recession and debt), failing to stimulate the economy, many economists fear, will lead to a double-dip recession. In other words, there’s a time to address the deficit, but the time is not now if we want our economy to return to health.

Beyond making it difficult to make ends meet for thousands of jobless workers in Michigan, the loss of unemployment benefits removes more than $200 million a month from Michigan’s economy, the National Employment Law Project estimates.

Michigan’s congressional delegation, for the most part, has been supportive of extending unemployment benefits. Only Reps. Candice Miller and Dave Camp voted ‘no.’ Rep. Peter Hoekstra was attending a fund-raiser for his gubernatorial campaign and didn’t vote.

Michigan has led the country in unemployment  for 49 out of  the last 50 months. It’s important that these benefits be reinstated quickly. A vote in the U.S. Senate could do that as early as next week. Please read the League’s statement issued today urging a fast vote.

Swan says many in Washington are out of touch with the reality she faces. The health care company she worked for, providing in-home assistance for respiratory patients, has cut its workforce from 25 to seven. Still, Swan says she’s lucky. She has an understanding landlord and she is considering moving in with a sister a few miles away. She is single, with just two cats to care for.

“I can’t imagine the pressure on someone who has a family to support,’’ she said.

Even with unemployment benefits, Swan says she’s watched her pennies. A crown on a tooth fell off more than a year ago, and she hasn’t had it replaced, instead using a temporary dental patch to fill the hole.

“I can’t go to a dentist,’’ she said. “I don’t have any choice.’’

— Judy Putnam


While you’re at the parade…

July 2, 2010

Judy Putnam

Thursday, we posted a blog urging people to tell their U.S. representatives how important extending unemployment insurance is for the thousands in Michigan about to lose benefits.

The U.S. House later that day voted to extend the benefits. Michigan’s Democrats all supported the extension as did four GOP representatives – Vern Ehlers, Fred Upton, Mike Rogers and Thad McCotter. (The rest voted no except for Peter Hoekstra, who did not vote.) The League this week sent letters thanking the four Republicans for joining the Democrats in understanding how important these benefits are to Michigan families struggling in this recession.

 The Senate is expected to act on the extensions when it returns from the Fourth of July holiday. Jobless workers will see their benefits disrupted, though they are likely to be restored when the Senate votes. (Sens. Debbie Stabenow and Carl Levin support the extension.)

Please thank the members of the delegation who support this! And when you see them at the Fourth of July parades or elsewhere, please tell them that Michigan needs fiscal relief in the form of enhanced Medicaid match. Without it, Gov. Jennifer Granholm has warned there will be huge cuts to the social safety net.

— Judy Putnam


Recovery Act’s life line in Michigan

July 1, 2010

Karen Holcomb-Merrill

New numbers show what an impact Recovery Act unemployment and food stamp benefits have had here in Michigan.  These numbers are particularly timely as unemployment and food assistance have been in the news.

There has been a lot of discussion, and concern, about unemployment benefits running out for 87,000 people in Michigan because Congress failed to extend them before the Fourth of July break.  Recovery Act dollars have played a significant role in providing these benefits during a time of very high unemployment.

According to estimates from the Center on Budget and Policy Priorities, unemployed workers in Michigan received over $1.9 billion in extended unemployment benefits, through May 28 of this year.  Also, unemployed workers received an additional $25 a week through the Recovery Act, totaling almost $700 million, up to May 28.

The League’s Economic Security Bulletin  reported this week that Food Assistance caseloads topped 850,000 for the first quarter of 2010.  That number is a 27 percent increase over the same quarter in 2009.  Almost 18 percent of Michigan residents live in households receiving Food Assistance. 

Like unemployment benefits, food assistance benefits provided through the Recovery Act helped sustain Michigan families during rough economic times.  The Center on Budget and Policy Priorities estimates that people in Michigan received almost $500 million in additional Recovery Act food assistance benefits through May 28.

Not only have these benefits helped families, but they have helped the Michigan economy as well.  It is well known that these benefits are quickly spent in local communities on food and other essentials. 

To keep this economic stimulus flowing in Michigan, Congress needs to act to extend unemployment benefits. The Michigan Unemployment Insurance Agency projects that more than 400,000 jobless workers will run out of benefits by the end of the year without that action.

Members of Congress will be home for the Fourth of July holiday, so if you have a chance, please let them know the importance of supporting extended unemployment benefits.

— Karen Holcomb-Merrill


Dog days of the budget cycle

June 22, 2010

Sharon Parks

Webster defines “dog days” as a period of stagnation and inactivity.  It’s the day after the start of the summer, and in Lansing it already feels like the dog days of summer.

Michigan is 100 days away from the new fiscal year, and we don’t appear close to having a budget. There is no agreement as to how to close the gap between revenues and expenditures; targets haven’t been set, and the whole process appears stalled.  Meanwhile, we creep closer to campaign season when there’s little likelihood of rational policymaking.

Monday’s Spotlight on Poverty, a national online source for news, ideas and action, focuses on the importance of federal aid and a balanced approach to state revenues, rather than cuts, as the immediate short-term solution to state budget problems. The article highlights the difficulty that many families and individuals have in making ends meet, and cites the harm of continued state budget cuts. 

In Michigan this is particularly true.  While we moved last month to No. 2 in the nation’s unemployment rate, we still have a long road ahead of us.  That journey could be made easier if policymakers would get over their fear of the “t” word and tackle the important job of overhauling our tax structure.  Wishing doesn’t make it so; action is needed now rather than later.

— Sharon Parks


Ouch! Survey results pinch

June 17, 2010

Judy Putnam

A recently released survey of local Michigan officials has a depressing finding: Only 1 percent of local officials think the American Recovery and Reinvestment Act has helped improve local economic conditions “very much.” Two out of every three say it has not helped at all to date, and more than half predict it won’t help at all over the long term.

Ouch! That’s a blow for those of us who have been advocating for extending vital features of the ARRA. (Those include extending the enhanced federal Medicaid match that will offer more than $500 million for next year’s state budget, Earned Income Tax Credit expansions, Child Tax Credit to benefit working poor families of nearly 600,000 kids in Michigan and 99 weeks of unemployment benefits for the state’s long-term unemployed.)

ARRA has poured critical dollars into our state at a critical time. Few of those dollars, however, went directly to local governments, a fact pointed out by the Michigan Municipal League in a well-publicized letter to Vice President Biden last year. Local governments struggle with the double whammy of sharply reduced revenue sharing from the state and declining property values, causing layoffs of public safety workers and other hardships.

But the Recovery Act money has flowed to many people in the communities: the unemployed, households on food assistance, those on Social Security and taxpayers. It is credited with saving an estimated 12,000 jobs in Michigan, most of them in education.  That help doesn’t go into a black hole — those are dollars that are quickly circulated in local economies.

The survey of more than 1,000 local officials was completed last fall. Perhaps, with time, more will see the benefit to their communities in projects such as weatherization.

Without doubt, the ARRA has paid off for local communities, even as tough times continue. What’s hard to imagine is how much worse it would be without the Recovery Act.

Michigan needed the Recovery Act in 2009. It needs it now – it’s important that Congress votes to extend the enhanced Medicaid match, EITC expansions, unemployment benefits and the Child Tax credit.

— Judy Putnam