UIA Update: Unemployment benefits help bolster state economy, $22B paid to workers

Emergency aid provided by the Michigan Unemployment Insurance Agency to vulnerable workers has boosted the state’s economic outlook, according to data and testimony shared by economists. At the recent Consensus Revenue Estimating Conference, University of Michigan economist Gabriel Ehrlich indicated that UIA’s efforts to pay benefits quickly and nation-leading Work Share program were credited with helping Michigan outpace the nation in consumer spending.
Since March 15, nearly $22B in unemployment benefits have been paid to more than 2.1M workers. As a result of this and other emergency aid, spending by Michigan residents has been three times higher than economists forecasted, helping families make ends meet and buffering the State Budget and State School Aid Fund against the most devastating cuts.

“Our unemployment system was designed to be a safety net for both our workers and economy,” said UIA Director Steve Gray. “As we have throughout the pandemic, the UIA will continue to work, day and night, to provide this emergency financial assistance quickly so that claimants have the resources to provide for their families.”

• Consumer Spending

Ehrlich noted that UIA did a “better job in getting benefits to people in a timely fashion” than other states, and that the state has “seen a stronger recovery in consumer spending here than nationally.” According to the Harvard-based Opportunity Insights, Michigan is 2nd in consumer spending relative to pre-COVID levels. 

• Work Share

Ehrlich also credited Michigan’s participation in the federal Work Share (WS) program, which allows employers who are still experiencing decreases in customer demand to bring back laid-off workers at reduced cost to support continued employment. Under this program, employees also collect partial unemployment benefits to make up for the lost wages. According the U.S. Dept. of Labor, Michigan led the nation in WS participation with more than 18% of all national WS participants.

The program has provided $450M in benefits helping over 2,500 Michigan employers and saving the State’s Trust Fund $212M. Nearly 97,000 employees participated at the peak of enrollment during the pandemic.

• Historic Demand

Since March 15, the UIA has received as many claims – nearly 2.6M – as it did in the nearly six previous years combined, from May 2014 to March 2020. For further comparison, weekly initial claims reached a high of more than 388,000 in April, while the in the weeks preceding the pandemic, the UIA received around 5,000 new weekly claims. Even during the Great Recession, the weekly high was around 77,000 in 2009.

• Paying Unemployment Claims

Since the beginning of the pandemic, over 2.2M certifying, potentially eligible claimants have applied for state and federal benefits, with nearly $22B in benefits paid to more than 2.1 million workers, or roughly 98% of potentially eligible, certifying claimants. There are currently less than 42,000 unpaid claimants with less than 26,000 needing ID verification and just under 14,000 in the adjudication process which requires a one-on-one review of their claim.

The UIA has made a determination on all currently eligible, certifying unpaid claims that were filed before July, provided that information has been submitted and the claimant is reachable. In making a determination, the agency will pay out benefits, determine that the claimant is ineligible and communicate why, or deem the claimant unreachable after multiple attempts to make contact.