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unemployment

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A legislative watchdog says Michigan’s unemployment office failed to catch overpayments and cases of fraud as the agency was hammered with jobless claims during the Great Recession.

The Michigan Auditor General says the mistakes cost taxpayers an estimated $260 million.

Like many states, Michigan’s been forced to borrow money from the federal government – almost $4 billion - to cover its jobless claims as unemployment reached peaks not seen in three decades (higher than 14%).

The Auditor General report found the agency ran into trouble handling all those claims.

The auditor’s sample found thousands of cases where the state accidentally overpaid benefits that were never recovered.

The audit also found instances where the state failed to detect cases of fraud that would have also been punished with big fines.

The unemployment agency is disputing some of the findings where the auditor determined there was fraud. The agency says in the other cases, it’s taking steps to fix the problems uncovered by the Auditor General.

(Flickr Steve Rhodes)

The unemployment benefits of 35 thousand jobless Michiganders are about to expire.  There is some debate whether the state should act to extend their benefits by another 20 weeks.    The debate is between those who say the benefits are critical to jobless workers and business groups that say they don’t want to be forced to pay for those benefits.  The clock is ticking.  

In case you missed it...

Mar 11, 2011
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Michigan Radio broadcasts hundreds of stories, interviews, and commentaries every week.

One person can't possibly hear them all.

Here, you'll find a few stories we think you might like to hear:

Oh You Shouldn't Have... no really - This American Life

Khalilshah / Flickr

Michigan's unemployment rate continued in decline in January to 10.7 percent. That's the lowest it's been in more than two years. And, it's three percentage points lower than the same time last year: the jobless rate in January 2010 was 13.7 percent.

The national jobless rate in January of this year was 9.0 percent.

Mr. Juniho / flikr

Budget cuts approved by the U.S. House of Representatives would close Michigan Works service centers.

The service centers are where people go to file for unemployment and can get training, education or use the Michigan Talent Bank.

The U.S. House budget proposal eliminates the federal funding that supports the centers.

Luanne Dunsford is the CEO of Michigan Works.

"If the house resolution goes through the funding for Michigan Works would be eliminated. The Michigan Works system serves over 3 million customers a year and our question is, where would those people go?

The U.S. House and the Senate are now negotiating budget proposals to decide the fate of several federal programs, including the Workforce Reinvestment Act which funds Michigan Works.

We want to get a better understanding of the kinds of services offered by Michigan Works. If you've used Michigan Works, what services did you use and what did you think of them?

Sarah Alvarez - Michigan Radio Newsroom

Steve Carmody / Michigan Radio

From General Motors adding another shift at the Flint Assembly plant to expansion in the city's medical and echnology centers, Flint's job picture is brightening.

Flint city leaders say their community posted one of the ten biggest drops in unemployment in the U.S. over the last 12 months.

Between December 2009 and December 2010, Flint's jobless rate fell from 16 percent to just under 12 percent.
Flint Mayor Dayne Walling says the city helped create or keep mare than a thousand jobs by encouraging entrepreneurial businesses.

For everybody who's left, there's a project out there that kept a job here too. That?s the other part of the story. It may not be a new job. It's not someone who's newly employed. But there are another 500 or 1000 people who would have left here if these projects wouldn't have been successful.

This all builds on what our president said in his State of the Union, that we need to create jobs and industries of the future by doing what America does best.  Investing in the creativity and innovation of our people.

Walling concedes people leaving Flint also helped improve the city's unemployment rate.
Flint's unemployment rate is still above state and national levels.

The unemployment rate fell .4 percentage points in January to 9.0%.

Keith Hall, the Commissioner of the Bureau of Labor Statistics said today:

In January, employment increased in manufacturing and retail trade, while job losses occurred in transportation and warehousing and in construction.  Employment in most other major industries changed little. Manufacturing employment grew by 49,000 over the month and has increased by 161,000 since a recent low point in December 2009.

The Associated Press reports:

The unemployment rate has fallen by eight-tenths of a percentage point in the past two months. That's the steepest two-month drop in nearly 53 years. But part of that drop has occurred as many of those out of work gave up on their job searches. When unemployed people stop looking for jobs, the government no longer counts them as unemployed.

Officially, there are about 13.9 million people in the country out of work. The AP says "that's still about double the total who were out of work before the recession began in December 2007."

The unemployment rate in Michigan stands at 11.7% as of December. New numbers should be out in the coming week.

Khalilshah / Flickr

Michigan's unemployment rate dropped in December to 11.7 percent. But, as Rick Pluta reports, the decline in the jobless rate was due mostly to people who have stopped looking for jobs:

Michigan’s unemployment rate dropped steadily throughout 2010. But there are still 555,000 people in Michigan who are out of work and looking for jobs. Half of them have been looking for six months or more.

There was little new hiring last month. The number of people who simply stopped looking for work is the biggest reason for the decline in the jobless rate. The state Department of Energy, Labor, and Economic Growth says the number of people who say they are available to work fell by 37,000.

When people who are looking for jobs, those who’ve quit looking, and part-time workers who’d like to be full-time are rolled together, Michigan’s rate of unemployment and under-employment is 21 percent.

Michigan’s unemployment rate in 2010 was 13.6 percent. That’s a drop of half a percentage point from the 2009 average.

A former student sent me an e-mail a couple days ago that made me both happy for her and concerned about our state. She had been a “ninety-niner,” Beth confided, and her prospects looked bleak.

She worried about having to move back in with mom and dad. But then, on Christmas Eve, she got a job. “Not a glamorous job, but a necessary one,” she said.

That made me happy for Beth, but also reminded me that there are at least 162,000 other ninety-niners in this state who aren’t as lucky. Ninety-niners, by the way, are people who have exhausted their unemployment benefits.

The U.S. House of Representatives voted to extend Bush-era tax breaks and extend jobless benefits for the long-term unemployed yesterday.  The tax-deal was brokered between President Obama and leaders in the House and Senate.  The President is expected to sign the bill soon.  As The Associated Press reports:

In a remarkable show of bipartisanship, the House gave final approval to the measure just before midnight Thursday, overcoming an attempt by rebellious Democrats who wanted to impose a higher estate tax than the one Obama agreed to. The vote was 277-148.

Republican Congressman Dave Camp of Michigan told USA Today:

Congress made the right decision ... to prevent a job-killing tax hike on Americans and small businesses.

The U.S. Senate had already passed the bill with a 81-19 vote.

George Erickcek is Senior Regional Analyst at Upjohn Institute
Lindsey Smith / Michigan Radio

Researchers at the Kalamazoo-based Upjohn Institute predict Michigan’s economy is stabilizing, but caution it will be a long road to a full recovery.

“We have to realize that what Michigan is coming out of is not a transformed economy, although all of us would like to think that’s true. We’re coming out a leaner economy, a little bit meaner and little bit more advanced but in fact just kind of a smaller version of what we were before, in my opinion.”

Senior Regional Analyst George Erickcek says full recovery will depend on the state’ ability to meet the demand for trained workers in growing industries. In a presentation to leaders in Grand Rapids Wednesday, Erickcek said 25 to 34 year-olds are not achieving the same education levels as the generation before them. That’s the case in Michigan and the nation.

Governor Jennifer Granholm
Photo courtesy of www.michigan.gov

Governor Granholm says she supports President Obama’s compromise with Congressional Republicans on tax cuts.

Granholm said that the President got a ‘good deal’ by extending benefits for the long-term unemployed in exchange for the extension of Bush-era tax cuts.

Granholm said the deal will keep 180,000 people in Michigan from losing their income during the holidays:

I look at this as governor of the state with the second highest unemployment rate in the nation and I'm grateful to the President for being a pragmatic leader... the collateral damage here in Michigan from not extending the unemployment benefits would be horrific.

Granholm made the comments during a White House conference call yesterday afternoon.

Unemployment benefits deal reached

President Obama says he has reached a deal with Republican lawmakers to extend unemployment benefits. 180,000 Michiganders were going to see their benefits expire by April if a deal was not reached. In exchange for the benefit extensions, Obama agreed to extend the Bush-era tax cuts at all income levels, including the wealthy. The New York Times reports that Obama said the deal is "not perfect, but this compromise is an essential step on the road to recovery." But a battle may still remain, congressional democrats say they have not agreed to any deal yet.

City bans medical marijuana

A fourth city has banned medical marijuana. Wyoming, a suburb of Grand Rapids, passed the ban last night in a unanimous city council vote. Michigan Radio's Lindsey Smith reports that Wyoming Mayor Jack Poll says the ban is not a rebuke of medical marijuana rather "this is a vote against the way it is being dispensed."  Medical marijuana dispensaries have been popping up in different parts of the state after voters approved the medical marijuana law in 2008. The dispensaries are often in nondescript storefronts. The Detroit Free Press reports that Mayor Poll, a pharmacist himself, says medical marijuana should be dispensed like other legal drugs, presumably at mainstream pharmacies.

State to honor Pearl Harbor Day

Governor Granholm is asking Michigan residents to lower flags to half staff today to honor Pearl Harbor Day.  Sixty-nine years ago this morning, Japan attacked U.S. Forces stationed at Pearl Harbor, Hawaii. 2,334 servicemen and servicewomen were killed. 1,143 were wounded. Granholm says the action also honors current  service men and women:

"We also salute the brave men and women currently stationed around the world, including those fighting in Iraq and Afghanistan, who are defending and protecting the freedom our nation holds so dear." 

One economist says the end of jobless benefits for thousands of Michiganders should not have a big effect on the number of jobs being filled.

 More than 180 thousand people in Michigan will see their unemployment benefits expire between now and April, unless Congress agrees to grant another extension. 

Kenneth Goldstein is with the Conference Board, a business research group.   He says there are few real new job options,  either full or part time for the ‘hard-core’ unemployed.

The White House is ramping up its efforts to get Congress to approve extended unemployment benefits for out-of-work Americans. Michigan's unemployment rate in October was the second-highest in the nation, at 12.8%.

The president's Council of Economic Advisers released a report that touts the need for extending benefits. The report says for the typical person getting unemployment, the benefits make up a third of the household income.  As Presidential adviser Cecilia Rouse noted:

And in those 42% of households where the unemployed person was the sole wage earner, it's about 90 percent of the income. So it's quite an important source of income for these families.

The report says about 620,000 people in Michigan received benefits through October.

Republicans in Congress say the cost of extending the benefits is too high. They want to look at budget cuts and tax cut extensions first.

Jobless benefits will expire for tens of thousands of unemployed Michiganders this week unless Congress approves an extension.

Many of those losing their benefits are expected to turn to Michigan food banks and other non-profit groups.

"Those safety nets are really not prepared to take on all of these extra families," says Judy Putnam, with the Michigan League for Human Services."

Michigan congressman Dale Kildee expects congress will approve extending jobless benefits for the long-term unemployed next week. 

An extension would allow people who’ve been receiving jobless benefits for more than 26 weeks to continue to receive financial aid.   The current extension expires next Wednesday.    Hundreds of thousands of unemployed Michiganders will stop receiving unemployment checks unless an extension is approved. 

Unemployment line in California
Michael Raphael / Flickr

The Associated Press reports that the state "will stop taking new extended unemployment benefit applications after Saturday because Congress has failed to renew the program."

Jobless
Photo by Khalilshah/Flick

Michigan's jobless rate continued its slow, but steady, decline in October.  The state's unemployment rate in October was 12.8%.  It's the first time the jobless rate was been under 13% since March 2009, according to the Associated Press. The state's jobless rate in October of 2009 was 14.4%.

The national unemployment rate for October was 9.6%.

 Time is running out again for many Michiganders living on unemployment benefits.

 Hundreds of thousands of Michiganders have spent nearly two years surviving on unemployment checks as the state struggles with a double digit jobless rate.

But time may be running out for those benefits.  Congress has passed several extensions but may not this time. 

Norm Isotello is with the state department of Energy, Labor and Economic Growth.    He concedes there is an argument that extended benefits may get in the way of people looking for work...but

help wanted sign
kandyjaxx/creative commons

The unemployment picture in Michigan is still bad. It stands at 13.1% now. The worst it's been since the early 1980's.

Now, a new report by the Michigan League for Human Services puts the long-term unemployment picture into perspective.  In 2000, people unemployed for more than 26 weeks, accounted for 6.5% of the total number of unemployed. Today, the long-term unemployed account for 40.8% of the unemployed.

The report says,

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