FILE - barber shop, hair salon, Illinois, Virus Outbreak Illinois Unemployment

A barber shop shows closed and hiring sign during the COVID-19 in Chicago, Thursday, April 30, 2020.

(The Center Square) – When COVID-19 hit Michigan and more than 1 million people lost their jobs, Unemployment Insurance Agency traffic increased by a multiple of 25.

After a 15-month closure and record claims, Unemployment Insurance Agency (UIA) Acting Director Liza Estlund Olson told lawmakers she is aiming to reopen unemployment offices by July 12. The agency has processed 5.1 million non-unique unemployment claims since March 2020, paying out more than $34 billion.

That breaks down as follows:

  • State Unemployment: $5.5B
  • Pandemic Unemployment Compensation (PUC): $19.2B
  • Pandemic Unemployment Assistance (PUA): $5.4B
  • Pandemic Emergency Unemployment Compensation: $2B
  • Extended Benefits: $0.4B
  • Lost Wages Assistance: $1.6B

The Labor and Economic Opportunity Department said last week 816,480 Michiganders are receiving unemployment benefits. Despite a partial recovery, the state is down 300,000 jobs compared to pre-pandemic levels.

Michigan’s unemployment rate dropped to 4.9% in April compared to April 2020’s peak rate of 22.7%.

Michigan is reinstating work search requirements May 30, which will require those seeking benefits to prove they’re searching for work, and employees can lose benefits if they reject job offers.

Rep. Greg VanWoerkom, R-Norton Shores, blamed the boosted benefits for a tight labor market in which many stores can’t find workers and have to either work extra hours or shut down.

Olson said the work-search requirement should bring people back to work and push back on the idea that boosted benefits encourage people to stay home.

“Folks aren’t staying on unemployment,” Olson said. “They could max out at 79 weeks (over a year). We are seeing 15 weeks for regular unemployment and 24 weeks for PUA.”

Rep. Sarah Lightner, R-Springport, said her office still has unresolved cases from July.

But many cases are fraudsters.

Director Of Legislative Affairs at the Michigan Department of Labor Todd Cook said fraudsters now brazenly email lawmakers asking for help to get claims approved.

Olson said the UIA is considering new technology to stop fraud. Still, different programs are running behind the scenes that stopped a “massive” unemployment fraud attempt on Easter weekend.

The hearing follows eight U.S. Republican Representatives asking Gov. Gretchen Whitmer to end the state’s $300/week enhanced federal supplemental unemployment benefits. Michigan had been implementing the program in response to the COVID-19 pandemic and the ensuing widespread layoffs.

About 24 other states have ended their enhanced unemployment benefits that boosted pay by $300 per week, but Michigan plans to ride the program through September, Olson said.

They could end the program, but roughly 600,000 people receiving benefits are 1099 (non-payroll) workers who otherwise wouldn’t receive benefits, and the other approximately 160,000 W-2 workers receiving benefits would get less, Cook said.

Those benefits, plus federal stimulus, have mainly kept Michigan’s coffers filled during the pandemic by handing cooped-up residents billions in benefits and stimulus checks, spiking personal spending.

The state general fund and school aid revenues will total $26.5 billion for the current budget year, exceeding January estimates by $2.2 billion. For the new budget cycle beginning Oct. 1, the agency projected revenues will total $26.6 billion, $1.3 billion more than January predictions.

Staff Reporter

Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.