Report says Michigan’s unemployment insurance system is outdated and discriminatory

Michigan’s unemployment insurance system is outdated and unable to adequately meet the needs of unemployed working families, and it is discriminatory against women and low wage workers, according to a recent report by the Michigan League for Human Services (MLHS).

The MLHS released the report, “Michigan Needs to Modernize its Unemployment Insurance System,” on June 11 as other states were passing legislation to accept funds from the federal government’s Unemployment Insurance Modernization Act (UIMA), part of the American Recovery and Reinvestment Act of 2009 that would both stimulate the economy and help unemployed workers simply survive.

The report says only half of Michigan’s 14 percent unemployed are collecting benefits, and the low number is the result of the outdated system operating under rules that were designed for the 1930’s New Deal program.

Senate Republicans left $140 million in federal funds on the table when they voted against American workers and against discharging House Bills 4785 and 4786 from the Senate Commerce and Tourism Committee last week. The bills, approved by the House on May 6, would provide unemployment benefits to individuals who are only available for and seeking part-time work and those in an approved job training program who have exhausted their regular benefits. It will pump $140 million in federal funds into Michigan which is suffering with double-digit unemployment.

Among the highlights of the MLHS report are that a minimum wage worker in Michigan must work nearly four times as many hours to gain UI monetary eligibility as a higher-wage worker. The full-time working requirement for UI disproportionately burdens female workers in the state. For every $1 of UI benefits spent by workers and families, there is an estimated $2.15 in economic growth. That makes Senate Republicans decision to stiff Michigan workers even more appalling.

The report also found part-time workers make up one-sixth of the nation’s workforce, but they are restricted from collecting UI in states like Michigan. This requirement disproportionately burdens female workers in the state who represent 68 percent of part-time workers nationwide. The requirement makes child care and parenting responsibilities a mess. Also, workers are often unable to find full-time work simply because no one wants to hire full time workers because it’s cheaper to hire two people who each work 20 hours instead of one and pay that one person benefits.

Michigan Senate Democrats recently launched a website calling for action on this plan that eleven other states have already approved to receive the funding allocated to them. The site encourages visitors to sign a petition and contact Republican Senators to demand support for the legislation.