by Bruce Walker
Michigan has 15 weeks before the state’s unemployment reserves are depleted.
The Tax Foundation released its assessment prior to Monday, April 13.
According to The Tax Foundation, Michigan had enough money to pay 16 weeks of unemployment compensation claims on the week ending April 4. Previously this week, the U.S. Dept. of Labor released the nation’s unemployment numbers through the end of last week.
According to DOL data, nearly 800,000 Michigan out-of-work residents have filed for unemployment as a result of the COVID-19 pandemic.
Nationwide, the number of unemployment insurance claims stands at approximately 14.38 million. That number represents approximately 8.5 percent of the U.S. civilian workforce.
According to The Tax Foundation: “The previous high was 7.9 percent early in 1975 during a recession, with a Great Recession peak of 4.8 percent between February and April 2009. Entering March 2020, unemployment claims as a percentage of the civilian labor force stood at 1.4 percent.
The Tax Foundation’s Jared Walczak reports that Michigan’s unemployment insurance solvency problem is slightly better than six states with less than 9 weeks of funding remaining. In the case of California, the Golden State is in the worst shape with only 19 days of unemployment insurance reserves as of April 10.
The Tax Foundation asserts the six states in most jeopardy represent approximately 37 percent of the total U.S. population.
The U.S. Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed by President Donald Trump on March 27. The stimulus package provides $600 a week to each state unemployment insurance beneficiary as well as provides extended benefits when state benefits expire.
Individuals collecting Michigan unemployment checks of up to $362 already have begun receiving the $600 federal money.
The CARES act widens eligibility for unemployment filing to include self-employed, 1099 independent contractors, gig workers and low-wage workers. CARES will pay the state benefit amount with federal funds as well as the $600 federal payment as early as April 20.
However, noted Walczak: “[S]tates must still come up with the funding for regular benefits, and unfortunately, many are woefully unprepared to do so.”
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Bruce Walker is a regional editor at The Center Square. He previously worked as editor at the Mackinac Center for Public Policy’s MichiganScience magazine and The Heartland Institute’s InfoTech & Telecom News.