Michigan Senate OKs unemployment boost with expanded, extended benefits

• The Democratic-led Michigan Senate approves legislation that would increase maximum unemployment benefits 
• Revised plan would extend eligibility to 26 weeks, bump maximum weekly benefit from $362 to $614 over three years
• Business groups, Republicans called the proposal an irresponsible move that would put pressure on the unemployment system

LANSING — Unemployed Michigan workers could collect additional benefits for longer under bills that Democrats in the state Senate approved Thursday over objections from Republicans and business groups. 

The legislation would expand eligibility for unemployment benefits from 20 to 26 weeks, permanently reversing a 2011 law signed by then-Republican Gov. Rick Snyder that cut unemployment insurance eligibility.

Amendments approved during a Thursday morning committee hearing would also bump the weekly benefit maximum from $362 per week to $614 per week over three years and then tie it to inflation.

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Supporters contend the proposed boost is warranted because it’s been decades since Michigan has increased benefits, citing the stagnant rate as a possible factor in the state’s ongoing population woes. 

“That money goes straight back into the economy, and it's really a buffer for folks who need it,” Sen. John Cherry, D-Flint, told reporters after the vote. “This just makes sure that we're providing a safety net.”

The legislation, which now heads to the House for consideration, would align Michigan with the majority of states that offer at least 26 weeks of unemployment benefits. Only 13 states, including Michigan, currently offer fewer weeks. 

During the height of the COVID-19 pandemic, Democratic Gov. Gretchen Whitmer approved a temporary expansion for workers subject to mass layoffs, but the state's Unemployment Insurance Agency subsequently came under fire after failing to stop a deluge of fraudulent claims.

Companion legislation approved Thursday by the Senate would establish additional guardrails around who can access the benefits, Cherry said, in an attempt to limit fraud and ensure benefits are limited to people who are actively trying to get a new job. 

Republican lawmakers and business leaders balked at the changes, arguing a dramatic increase in benefits would threaten the state’s unemployment funds and potentially trigger additional costs for employers who fund the system.

“Increasing the weekly maximum benefit with an undefined cost to Michigan job providers is irresponsible and will threaten the state’s competitiveness compared to neighboring states,” David Worthams of the Michigan Manufacturing Association said in a statement. 

“Ultimately, the cost of this staggering benefits increase will be borne entirely by Michigan job providers.” 

In a floor speech, Sen. Thomas Albert, R-Lowell, said unemployment benefits “do not magically appear at no cost — it is not free money.” 

Cherry countered that the fund is in good shape and is sustainable. In a worst-case scenario of full economic collapse, he said the fund’s balance “would be in jeopardy regardless of what our maximum benefit level would be.”

Republicans have called for additional oversight of Michigan’s Unemployment Insurance Agency following missteps during the pandemic. A third-party audit estimated that from March 2020 through September 2021 cumulative UIA errors cost the state an estimated $8.5 billion.

UIA Director Julia Dale, who took over the agency in 2021, said this spring that the agency has made significant improvements. The UIA has moved away from “quick fixes” and is instead “driving toward lasting change” through technology and personnel improvements, she told lawmakers.

Republican leaders said the latest package doesn’t go far enough to address issues and instead introduces new ones. 

“There's some big challenges with the Unemployment Insurance Agency,” Senate Minority Leader Aric Nesbitt, R-Lawton, told reporters. “What they passed today doesn't do anything, it doesn't fix the problems.” 

To become law, the Senate-passed bills would need approval from the House before the end of the year, when the current session ends. The effort would likely face stiff opposition next year in the chamber when Republicans assume majority control. 

In June, the House approved similar legislation to increase unemployment eligibility, though that proposal didn’t include a hike in maximum weekly benefits. 

The House sponsor, Detroit Democrat Karen Whitsett, at the time expressed interest in increasing that amount, telling reporters her “dream number” was $600 a week.