Shooting ourselves in the foot

Michigan and the seven other states that cut unemployment benefits in the wake of the Great Recession caused financial hardship for unemployed workers and failed to boost the overall economic outlooks of the states, a new report from the Economic Policy Institute concludes.

Problems with the unemployment system actually stemmed from underfunding the state trust funds in good times, rather than paying out benefits too generously, the report concludes. And cutting benefits not only shortchanged jobless workers and their families, it undermined the countercyclical role of the unemployment system that is designed to kick in when times are tough.

In the eight states cutting benefits, African American workers made up a more disproportionate share of the long-term unemployed than African American workers in the other 42 states.

The Michigan Legislature cut the basic period of unemployment benefits from 26 weeks to 20 weeks beginning in January 2012 — even as unemployment remained high and long-term unemployment took its toll on families across the state.

In State Cuts to Jobless Benefits Did Not Help Workers or Taxpayers, EPI Research and Policy Director Josh Bivens, economist Valerie Wilson, and economic analyst Joshua Smith provide an overview of the U.S. unemployment insurance system, explain the interaction between federal and state financing of unemployment insurance, and examine the economic conditions of states that cut the duration and dollar amount of jobless benefits.

“There’s no evidence of any benefit to reducing the length or dollar amount of unemployment insurance when the economy is so weak,” said Bivens. “It’s hard to understand why states would shoot themselves in the foot like this.” (more…)

Vets lose benefits as we celebrate Fourth of July

Just as we head into one of our most patriotic celebrations of the year next week (the Fourth of July), a new estimate out shows that 285,000 unemployed veterans will lose jobless benefits by the end of June, including thousands of out-of-work vets in Michigan.

Extended benefits known as Emergency Unemployment Compensation expired Dec. 28. Congress’ failure to extend the benefits means that 1.3 million workers were cut off from unemployment benefits nationwide at the end of last year, with an additional 1.6 million exhausting their regular state benefits in the first six months of this year. Included in those numbers are nearly 300,000 jobless vets, Chad Stone, chief economist at the Center on Budget and Policy Priorities, estimates. (more…)

Ramp up pressure on Unemployment Insurance

“I agree with you, I want to do it, now make me do it.”  ~ President Franklin D. Roosevelt to Sidney Hillman and other labor leaders after his election in 1932.

“I don’t think there is a great sense of pressure on our members.”  ~ Deputy Whip Rep. Tom Cole, R-Okla., responding to a question about renewing long-term Unemployment Insurance benefits, 2014.

The U.S. Senate passed a bill to extend Emergency Unemployment Compensation Monday evening with bipartisan support and with benefits retroactive to Dec. 28 when the program expired. Yet U.S. House leaders show little interest in bringing it up for a vote. (more…)

War on Poverty: Part 2

From the League’s First Tuesday newsletter
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Today marks the 50th anniversary of President Lyndon Baines Johnson’s now-famous State of the Union address that launched the War on Poverty:

“Unfortunately, many Americans live on the outskirts of hope — some because of their poverty, and some because of their color, and all too many because of both. Our task is to help replace their despair with opportunity.

While some pundits will undoubtedly seize the anniversary as an opportunity to wrongly declare the War on Poverty a failure, we should instead recommit to LBJ’s vision, as there is plenty of evidence that it worked. And what an incredible return on investment! (more…)

Unemployment drama redux

It is December again. Along with the annual holiday season comes what is beginning to feel like an annual drama: Congress approaching year’s end without reauthorizing long-term Unemployment Insurance benefits.

If Congress does not reauthorize Emergency Unemployment Compensation, up to 189,700 Michigan workers could lose benefits as they continue to look for jobs: 43,800 immediately, an additional 86,500 if their unemployment goes beyond 20 weeks before June 2014, and 59,400 more if they go beyond 20 weeks between July and December 2014. (more…)

Weakening worker protections

Charles Dickens created his novel Oliver Twist to portray the brutal exploitation he saw in the workhouses in his city of London. (We now know that the laborers were treated even more ruthlessly in real life.William Blake wrote about extremely young boys being sold as chimney sweepers, whose lives were cut short from all the coal dust they breathed on the job. Upton Sinclair painted a grisly picture of the conditions and dangers in Chicago’s meatpacking plants. And John Steinbeck wrote about what happens when exploited workers attempt to organize a union.

These works of literature sparked moral outrage in the 19th and 20th centuries and eventually led to many of the labor protections we have come to expect in the developed world today. A new paper from the Economic Policy Institute, however, shows a coordinated effort across the country to roll back or weaken state labor laws on child labor, the minimum wage, overtime, workplace safety and other labor protections. (more…)

Making Michigan truly a ‘comeback state’

As the annual Mackinac Policy Conference continues, we’re sure to hear a lot about Michigan as the “comeback state.” (Just check out #MPC13 on Twitter and Gov. Rick Snyder, who tweets under @onetoughnerd.)

Sponsored by the Detroit Chamber of Commerce, the conference brings together business people and politicians on Mackinac Island for an annual confab on policy. (more…)

Michigan African American unemployment highest

May 16, 2013
Contact: Judy Putnam at Michigan League for Public Policy (517) 487-5436
 
Michigan has highest unemployment rate for African Americans in nation

LANSING, Mich. – Michigan workers were hit hard by the Great Recession but the state’s African American workers continue to suffer a far higher unemployment rate, a new Economic Policy Institute Issue Brief finds, with Michigan’s black unemployment rate the highest among the 24 states where it can be measured.

In Ongoing Joblessness in Michigan: Unemployment rate for African Americans tops in nation, more than double the state’s white rate, EPI researchers Douglas Hall and Mary Gable find that the African American unemployment rate in Michigan reached 18.7 percent—nearly one in five of the state’s black workers—in the fourth quarter of 2012, about two-and-a-half times that of the white unemployment rate of 7.5 percent. (more…)

Still unemployed? Sequestration hurts!

To many, the automatic budget cuts known as sequestration may seem like an abstraction, but Michigan long-term unemployed workers are feeling it in a very real-world way.

Workers who have been unemployed for more than 26 weeks collect Emergency Unemployment Compensation until they find a job. Because EUC is fully federally funded, it is subject to the across-the-board cuts demanded by sequestration.

For Michigan workers collecting EUC, this translates into a 10.7% cut in their weekly benefit beginning with their first payment this month. (more…)

One-third of working families are low income?

You read the headline correctly. If we define low-income families as those with household income below 200% of the poverty line (the definition used by many state and national organizations that address poverty issues), then 32 percent of working families in Michigan and in the United States as a whole are low income.

A new report by the Working Poor Families Project shows that Michigan ranks right in the middle (26 out of 50) among states in the percentage of working families with household incomes below 200% of poverty.  For a single mother with two children, that means an income below $32,246; for a two-parent family with two children, it is $45,622. (more…)

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