Over 1.7 million applicants push Michigan unemployment system to the brink

State legislators got their first look at overall jobless claims Wednesday after two months of coronavirus layoffs. Eight percent of applicants still await payments. (Shutterstock)

More than one-third of Michigan’s workforce has entered the unemployment system since March 15, the state official in charge of getting them benefits said Wednesday.

That number represents 1.7 million workers who have lost jobs during the coronavirus crisis, said Steve Gray, director of the state’s Unemployment Insurance Agency (UIA). 

So far, Gray told legislators at the Michigan Joint Select Committee on the COVID-19 Pandemic, 92 percent of unemployed workers — or 1,374,751 people — have received payments.

 

But it’s the other 8 percent who are still waiting for jobless benefits who have Gray and his newly expanded staff working seven-day weeks amid the surge of applicants that still stresses the unemployment system.

“These are the cases that are keeping me up at night,” Gray said of the 134,130 people still awaiting approval of their claims.

Those workers who have not yet obtained payments also drew the focus of legislators. 

Gray and Todd Cook, director of legislative affairs for the Michigan Department of Labor and Economic Opportunity, answered questions for more than two hours on Wednesday, as legislators requested details on how the office responded to the waves of newly jobless workers as the coronavirus crisis unfolded. 

Layoffs started to press the system when restaurants closed on March 16, Gray said. The public health response to the spreading virus then escalated quickly, with Gov. Gretchen Whitmer issuing a stay-at-home order and closing non-essential businesses.

That sent Michigan’s unemployment system into its own crisis as the staff, computer system and existing regulations struggled to meet demands.

“It hit us like lightning,” Gray said.

It also exposed flaws in the system, he added. The UIA cut procedural red tape over the past six weeks, streamlined certification steps and turned off the 10-day hold requirement so that money reached jobless workers more quickly. It also removed a penalty for employers forced to lay off workers.

Jobless workers began complaining nearly immediately that they were unable to access the system — either through a computer system that lacked capacity and at one point crashed or by phone, when some people reported more than two-hour waits. 

Those complaints continue to come into legislators’ offices, said Rep. Julie Calley, R-Portland. 

“I have two full-time office staff members and they’re full-time helping people who could not get through,” she said.

Applications that have been flagged for review also have been a problem. Gray said a review that normally would take three weeks instead took “a number of weeks longer” as the number of applicants spiked.

According to Gray’s presentation, the number of filings represents a 3,300 percent increase in initial claims over the previous eight weeks. At its peak, there was about a five-fold increase over the highest demand week during the Great Recession just over a decade ago. 

The UIA went into “surge planning,” Gray said. Among the solutions was adding staff to the department, with many moving over from Michigan Works offices. Customer-facing staff in the unemployment office started at 130 people on March 1. By May 13, that number had climbed to 1,757. 

“I understand that is of little consolation to those that missed payments,” Gray said. 

So far, $5.62 billion in payments to unemployed workers have been made since March 15, Gray said. Some of that represents federal funds, including CARES Act payments. They also are going to workers who initially did not qualify for unemployment benefits, such as contract and part-time workers. 

Several legislators asked questions about whether the UIA knew what kinds of pressures it would face as Whitmer planned the shut-down. 

“Did you have an internal estimate of how many people would be driven out of work by these orders?” asked Sen. Aric Nesbitt, R-Lawton. 

“We were seeing what was happening in New York and Washington,” Gray answered, “so we know the volume would be astronomical.” 

But Cook, the Labor legislative director, did not give a precise timeline of the state’s lockdown planning, something some legislators sought through multiple questions. He pointed to the chain of emergency command in Whitmer’s administration as the source of the timing for when the UIA learned about the shutdown and which industries would be affected without providing details.

Other questions were raised about the Michigan Unemployment Trust Fund, which had $4.6 billion at the end of 2019. The rate of unemployment payments threatens to drain the fund by this summer, with the solution being borrowing from the U.S. government to continue providing benefits.

“We are drawing down as many federal dollars as possible so as not to put stress on the trust fund,” Gray said. 

Potential revisions to Michigan’s unemployment system also were raised, including by Sen. Adam Hollier, D-Detroit, who was among four legislators who announced Tuesday they support a list of changes. Among them: lengthening the duration of unemployment benefits, which was reduced in Michigan to 20 weeks from 26 weeks during the Snyder administration, and increasing the $362 maximum benefit, an amount unchanged for 18 years.

Gray said the unemployment generated by the pandemic “exposed every possible crack and need that we have” to help jobless people access benefits. That includes a certification process that can be cumbersome and regulations that look at an applicant’s previous jobs. 

Both legislators and the UIA agency representatives said their priority today is that Michigan workers who have lost jobs access their benefits when they need them. 

“We’ve tried to keep a human side to this,” Cook said. “These are real people with real families.”

Rep. Jack O’Malley, R-Lake Ann in northwest Michigan, asked what residents should do if they see problems persist. Gray said he’d be surprised to hear many more are out there and not addressed in the pipeline of reviews. His advice is for them to contact the UIA office, and turn to their representatives for help if they still struggle to get through.

“Everyone’s going to get paid who is eligible,” Gray said.

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Comments

Mark
Wed, 05/13/2020 - 8:22pm

Talking about unemployment I had a similar experience of accomment on some article I read here of a contractor not receiving any help. He or she couldn't work under Governor's orders, and then told he was not part of the michigan workforce but had documentation to prove he was.
I thought I was all set under the pua being a painting contractor for 25 years with work on hold but wanting to obey the order , then they sent me some ambiguous questionnaire if I was available for work, I filled it out wrongly and was told I was ineligible. They made it appear like I didn't want to work I guess that how they wanted to make it look. I have protested it but now it has been sitting limbo for about 3 weeks. So a month and half of wages gone no compensation. I started working again on the 7th and working hard to make up not having an income by the state edict. It is very wrong but what can you do? Move on I guess, but i am the sole bread winner in my family so it hurt.

Anonymous
Wed, 05/13/2020 - 9:11pm

Only another million or more to lose their jobs and Governor Whitmer will be happy with the success of her house arrest dictates...

Mary Sue
Thu, 05/14/2020 - 1:39pm

Do you think she didn't know that her house arrests would cause massive unemployment and lead to falling sales and tax revenues and then massive cuts to education and healthcare and roads? Or did she know these would happen but think that she would be 'saving' people, even though 'flattening the curve' doesn't in fact save anyone? Or do you think she just doesn't care and the main goal is to get and keep power so she can provide contracts and benefits to her close allies and friends who helped her get elected? I guess we'll never know her motivations, beyond what is provided in this video below...
https://www.youtube.com/watch?v=bw8yJ4GgmCE

Kazoo86
Thu, 05/14/2020 - 11:01am

With the millions of people out of work it is a shame, the devastating impact this is having on our future. Thank goodness for the government financial support. But, at what cost? Fortunately, I am of the age, I won’t be writing that check. All these wack jobs on the fringe of mentality, will always be against things, including life itself. Eventhough arguing constitutional support, nothing could be further from the true as the constitution frames them in. The laws that protects them, are too confining. Perhaps they want no laws, where are we then? Free-for-all!

Carl Holmes
Thu, 05/14/2020 - 10:47pm

The cost, Mr. Kazoo, will be massive inflation. Go to the store and go shopping- your groceries should already be going up in costs. Inflation will be a sneaky and deadly tax on people, working to further separate the rich from the poor and crushing the middle class further. You're probably too dumb to know this, or in the upper class.

What is amazing is that arguing for the laws, principles, policies, beliefs, and ideas that served our nation from 1789 to March 2020 is now radical. If I argue we should do what we did for several hundred years as a state, suddenly I'm the crazy anarchist. Whereas arguing for a massively different political system (one person rule over the State of Michigan without checks or accountability), and you think you're the sane one. What a difference a couple months makes. I guess the mask has slipped off the communists faces because of the Wuhan Lung Flu.

Kazoo86
Thu, 05/14/2020 - 11:01am

With the millions of people out of work it is a shame, the devastating impact this is having on our future. Thank goodness for the government financial support. But, at what cost? Fortunately, I am of the age, I won’t be writing that check. All these wack jobs on the fringe of mentality, will always be against things, including life itself. Eventhough arguing constitutional support, nothing could be further from the true as the constitution frames them in. The laws that protects them, are too confining. Perhaps they want no laws, where are we then? Free-for-all!

Mike
Thu, 05/14/2020 - 12:00pm

Looks like Michigan's unemployment rate is far worse than it was during the Great Depression. Gov. Whitmer should be ashamed of herself.

Anonymous
Thu, 05/14/2020 - 4:43pm

Do you think this is a bug or the feature? If everyone loses their jobs and goes on welfare and becomes dependent on the state for their handouts, then doesn't that give the state (and the person who unilaterally controls the state for as long as she wants) quite a bit of power?

Anonymous
Sat, 05/16/2020 - 12:25am

Nothing for these unemployed to do but sit around and wait until the whim strikes the Governor to let them go back to work. And it's no use planning or trying to figure out when it'll be- there is no logic or reasoning to the whimsy of Halfwhit.