12/15/2011 01:04 pm ET

Michigan Unemployment Benefits To Be Cut Further

Several bills passed Wednesday in the Michigan legislature will further reduce benefits for Michigan's unemployed, if signed as expected by Gov. Rick Snyder.

Bills 806, 483 and 484 add new limitations to eligibility requirements for unemployment benefits and make changes that aim to help stabilize the unemployment insurance fund. They come after unemployment benefits for Michiganders were previously cut in March of this year.

Bill 806 changes the definition of leaving work voluntarily, one cause of benefits ineligibility, to include missing three consecutive work days without proper notice. The definition of "unsuitable" work -- that which is below or outside a worker's skill level -- also changes in Bill 806. Now, any job that pays at least 120 percent of the weekly unemployment benefit amount will no longer be considered unsuitable once a worker has received 10 weeks of benefits. That means workers will no longer be eligible for benefits if they can find a paying job -- any paying job.

Republicans say they designed the legislation to reduce fraud, reform the unemployment system and encourage the unemployed to find work before exhausting benefits.

"Government cannot create jobs, however, it can create an environment where businesses are better positioned to grow and hire new employees," Sen. Jack Brandenburg (R-Harrison Township) said in a statement. "This measure equips businesses with the tools to do just that."

Bill 806 passed in the Senate by a 26-12 vote after passing in the House. Both votes were largely along party lines.

Democrats and those working for unemployed workers' rights opposed the bills' cuts to benefits.

"The legislation rewrites more than 30 different sections of the state's unemployment insurance law with the intent of shifting the balance of power to favor corporations who can afford to hire legal representation and who often contest legitimate claims as way to control costs," Michigan Unemployment Insurance Project general manager Steve Gray argued in an op-ed in the Free Press.

The other two bills are designed to help Michigan pay back the approximate $3 billion owed to the federal government for unemployment benefits through state-issued bonds.

The Associated Press reports that Gov. Snyder is likely to sign the bills, according to spokeswoman Sara Wurfel.

In March, Michigan passed a bill that reduced unemployment insurance benefits from 26 weeks to 20, becoming the first state to make such a reduction. According to Snyder, it was necessary to reduce state benefits in order to get support for a bill to keep Michiganders eligible for the federal Extended Benefits program, which provides an additional 20 weeks of unemployment insurance. Had the bill not been signed, 35,000 unemployed would have not gotten expected money from EB in April.

Michigan Democrats and groups like the National Employment Law Project argued that it wasn't worth sacrificing state unemployment insurance for federal EB.

A report recently showed a decline in the number of people receiving unemployment benefits nationally, however, approximately half of that can be attributed to 315,000 Americans who left the job market because they were unable to find work.

And while Michigan's unemployment rate recently fell below 10 percent for the first time in three years, the state's jobless rate is worse than the national average -- part of the reason it has had to borrow so much from the federal government for the UI fund.

A September briefing from the National Employment Law Project argues that Michigan's unemployment benefits payments to workers are already too low. In 1993, the maximum weekly benefit was tied to 58 percent of the state average weekly wage. Today, unemployment insurance payouts have not increased with wage growth, and the maximum weekly amount is $362 -- it would be $477 if it used the 1993 formula.

"At just under $300, Michigan’s average weekly UI payment in 2010 would have left a mother of two below the poverty line," the report states.