In Tough Economy, Michigan Targets Jobless Benefits The Labor Department on Friday releases the jobless rate for March. Economists believe roughly 160,000 jobs were added, a pace far too slow to absorb the nearly 14 million Americans looking for work. States are struggling to pay for unemployment benefits, and this week Michigan became the first state to reduce the amount of time people stay on unemployment.
NPR logo

In Tough Economy, Mich. Targets Jobless Benefits

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
In Tough Economy, Mich. Targets Jobless Benefits

In Tough Economy, Mich. Targets Jobless Benefits

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

Nearly 14 million Americans are unemployed and states are struggling to pay unemployment benefits. This week, Michigan became the first state to reduce the number of weeks it lets people collect unemployment.

As NPR's Sonari Glinton reports, Michigan is the first, but it may not be the last.

SONARI GLINTON: This month, Michigan needed to pass a bill to get more federal money to pay for unemployment benefits. And on Monday, that's what Michigan's legislature and governor, Republican Rick Snyder, did.

Governor RICK SNYDER (Republican, Michigan): We've got 35 to 37,000 people that we're going to have their benefits expire and they're in real need still. And there's probably another 150,000 people that will receive the extended benefits because of this.

GLINTON: The bill extended benefits for people already getting them this year. That's good for people getting unemployment benefits now. But here's the thing, that's just for this year. Beginning next year, the bill also cuts the amount of time a worker can get state unemployment from 26 weeks down to 20.

Snyder says he agreed to the cut as a compromise with state Republicans.

Gov. SNYDER: We had an immediate bird-in-the-hand issue of people that were going to lose benefits. In a very tough economy with a very high unemployment rate, my view was, let's create that safety net feature, let's continue that.

GLINTON: When there's an economic downturn and people go on unemployment, the state should have enough money to cover the benefits. But if the downturn lasts long enough, states burn through that money quickly. So a state like Michigan has to borrow from the federal government. And the Feds eventually want their money back with interest.

Right now, Michigan owes about $4 billion. In Michigan, as in most states, employer taxes pay that bill.

Ms. WENDY BLOCK (Director, Health Policy and Human Resources, Michigan Chamber of Commerce): Every dollar you have to pay for unemployment taxes is a dollar you can't be paying to put somebody back to work who's currently unemployed.

GLINTON: Wendy Block is with the Michigan Chamber of Commerce. She says the way to fix the problem is not to increase taxes on business.

Ms. BLOCK: States need to be realistic about the debt load that they have to the federal government. You don't solve a $4 billion problem by increasing benefits or increasing weekly payouts.

GLINTON: Michigan isn't alone. A bill cutting unemployment benefits passed in the Florida House this month and has been sent to their Senate. Rick McHugh is with the National Employment Law Project, a group that advocates for low-wage workers. He says this is the beginning of a dangerous trend.

Mr. RICK McHUGH (Staff Attorney and Midwest Coordinator, National Employment Law Project): Because if we can go to 20, then some other state can go to 15 weeks and eventually you end up with a social safety net that's not worth the name.

GLINTON: Tom Parks was in the telecom industry in Lansing, Michigan for years. That is until he was unlucky enough to get a pink slip five months after his wedding.

Mr. TOM PARKS: Yeah, welcome to marriage, right?

(Soundbite of laughter)

Mr. PARKS: But, you know, if you can make it through that, you can make it through anything, I guess.

GLINTON: Parks stayed unemployed for 21 months. He says cutting benefits for people like him will eventually hurt Michigan's economy.

Mr. PARKS: We would have had no other choice but to file bankruptcy, walk away from our house. We would have had to go to another state, hoping that the economy would be better there and that there would be more opportunities.

GLINTON: Parks says Michigan can't afford to lose any more residents. And proponents of the new law say Michigan can't afford to lose any business.

Sonari Glinton, NPR News.

Copyright © 2011 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.