About 442,000 Michigan residents to lose federal COVID jobless aid Saturday

Beth LeBlanc Breana Noble
The Detroit News

Roughly 442,000 Michigan residents will lose special federal COVID-19 unemployment aid Saturday as the pandemic era benefits expire. 

Those affected by the end of the benefits include individuals receiving Pandemic Unemployment Assistance, Pandemic Unemployment Compensation, Mixed Earners Unemployment Compensation and Pandemic Emergency Unemployment Compensation.

PEUC offered an additional 53 weeks of benefits to those who had exhausted a state claim, while PUA provided benefits to people who usually didn't qualify for unemployment, such as self-employed or gig workers.

PUC added another $300 in federal aid to unemployment payments and MEUC added $100 week for people who earned at least $5,000 in net self-employment income. 

The state's Unemployment Insurance Agency has distributed $38.5 billion in jobless benefits to 3.4 million claimants since March 15, 2020, the majority of that in the form of federal pandemic-specific benefits. 

The state has paid $21.5 billion in pandemic unemployment compensation, $5.9 billion in pandemic unemployment assistance, less than $100,000 in mixed earners unemployment compensation and $2.8 billion in pandemic emergency unemployment compensation, according to state data.  

Job search or training help is available through Michigan Works, the Return to Work Pay Book or the Pure Michigan Talent Connect for those losing benefits Saturday, the agency said. 

“We want to make sure Michiganders who have been receiving these temporary benefits are aware of other resources available to help them get back on their feet and find new employment opportunities," Unemployment Insurance Agency Acting Director Liza Estlund Olson said last week.

Some individuals may still qualify for state benefits under pandemic emergency unemployment compensation and "they should click on the reopen/file a claim link in their MiWAM account to see if they do qualify," said Nick Assendelft, a spokesman for the agency.

In addition, after the Saturday deadline, protests, adjudications and pending eligibility determinations for federal benefits will continue.

"If there is an issue with your claim, we will continue to work on it," the agency said, referring to unpaid claims pre-dating Sept. 4. "If it’s determined that you are eligible for benefits, you will receive those retroactively."

Residents still making claims should have received a new U.S. Bank debit card that will replace the Bank of America card formerly in use, the unemployment agency said in a statement. The old card should be kept for about a year for future reference. 

Claimants also should watch their MiWAM account for further correspondence, key information or possible signs of fraud. Suspected fraud should be reported to the agency hotline at (866) 500-0017.

The end of federal benefits comes none to soon for Michigan Republican lawmakers, who sought earlier this summer to end the aid early in a bid to push people back into the work force. Several other states had adopted similar early cutoffs, but Democratic Gov. Gretchen Whitmer vetoed the Michigan GOP bill. 

“Unemployment insurance is an important, temporary safeguard for workers suddenly out of a job, and state benefits will still be here for those in need,” Rep. Mark Tisdel, R-Rochester Hills, said Thursday of the impending deadline. “Thankfully, the job market is brimming with opportunities for people as they look for work.”

Conservative fiscal experts agreed that the end of federal COVID-19 jobless aid would lead to a stronger work force.

"More jobs are going to be filled as a result, which is good for workers and employers,” said Michael LaFaive, senior director of fiscal policy at the conservative-leaning Mackinac Center for Public Policy.

LaFaive cited a 2015 study from the National Bureau of Economic Research showing that after extended Great Recession unemployment benefits ended, 2.1 million individuals secured employment in 2014 due to the benefit cut and more than 1.1 million of those workers wouldn’t have participated in the labor market had benefit extensions been reauthorized.

“If you pay people not work, they’re not going to work or at least fewer of them will,” LaFaive said. “The unemployment benefits also were implemented during government-enforced shutdowns, which are long gone.”

But other research indicates in the 26 mostly Republican-led states where the enhanced benefits ended early, it did not substantially increase the number of people returning work. In addition, household spending dropped $2 billion, according to a study released in late August and written by economists at Columbia University, Harvard University, the University of Massachusetts Amherst and the University of Toronto.

Employment jumped 4.4% relative to states that kept the benefits flowing. That translates to one in eight unemployed individuals in the “cutoff states.”

“Data shows there wasn’t this increase employment, but an increase in material hardship,” said Patrick Cooney, assistant director of policy impact at Poverty Solutions at the University of Michigan. “It’s in the past seven days, have you had difficulty paying for basic households needs? With so many people out of work and have not returned to the labor force, it is a little worrisome.”

The end of benefits comes as the August jobs report missed expectations. The country added 235,000 jobs while the unemployment rate fell to 5.2%, according to the U.S. Labor Department.

“I suspect there are still plenty of jobs open and available,” LaFaive said. “In light of this new data point, I wonder if there is a new-found caution among businesses who were set to hire more.

"Some employers may be more cautious watching infection rates. Business people do not like uncertainty. With rising numbers, there’s the chance new mandates are going to be imposed coercively by some level or several levels of government.”

For families, the good news is that as the enhanced benefits are ending after the roll-out of the increased childhood tax credit began. Half of the 2021 tax credit started being paid out monthly.

Families receive up to $300 per month for children under 6 years old and $250 for children ages 6 to 16. After the first deposits in July, the U.S. Census Bureau reported households saw a 3 percentage point decline in food insecurity.

“It’s heartening to see that expanded child tax credit is helping families to pay for basic household expenses, which is obviously the design of the intervention,” Cooney said. “The roll-out is happening and the extended unemployment ends.”

The distribution of jobless benefits in Michigan has been drenched in controversy for the past year and a half as the agency sought to distribute aid to record numbers of unemployed while attempting to implement the new federal programs. 

The crush of claims led to months-long delays, legislative inquiries into the issues and controversial decisions by the UIA to speed the distribution of benefits.

In spring 2020, the agency lowered some of its security walls to speed distribution, but the decision came amid an unprecedented number of attempts to fraudulently gain benefits by in-state, out-of-state and foreign actors. 

The unemployment agency estimates it lost hundreds of millions of dollars in fraudulent claims but the final figure is not yet known.