More New York Times' s crusading against state spending cuts in Tuesday's edition. Reporter Michael Cooper’s “Michigan, With Persistent Unemployment, Cuts Jobless Benefit by Six Weeks” raised quite a grand commotion out of a small cut in Michigan’s unemployment benefit plan: The state will now pay only 20 weeks of benefits to the jobless, instead of the standard 26 weeks (and even those come before federal unemployment benefits kick in, which now run for up to 99 weeks).
The story’s text box implied bad faith on the part of new Republican Gov. Rick Snyder. “A surprise inside a bill whose purpose was to extend federal benefits.”
Michigan, whose unemployment rate has topped 10 percent longer than that of any other state, is about to set another record: its new Republican governor, Rick Snyder, signed a law Monday that will lead the state to pay fewer weeks of unemployment benefits next year than any other state.
Democrats and advocates for the unemployed expressed outrage that such a hard-hit state will become the most miserly when it comes to how long it pays benefits to those who have lost their jobs. All states currently pay 26 weeks of unemployment benefits, before extended benefits paid by the federal government kick in. Michigan’s new law means that starting next year, when the federal benefits are now set to end, the state will stop paying benefits to the jobless after just 20 weeks. The shape of future extensions is unclear.
Cooper overlooked an argument: Perhaps one factor in why unemployment rates are so high is that unemployment benefits are so generous. The idea that unemployment benefits can reduce workers's incentive to work has been advanced by such right-wingers as Paul Krugman, economist turned left-wing columnist for the Times (though when Republicans made the same argument he called them crazy).
Cooper implied ulterior motives on the part of “business groups,” and later threw in an anti-business aside:
Advocates for the unemployed called it a bad trade. “We have a temporary change to help some jobless workers that is imposing an indefinite or permanent cost on future jobless workers,” said Rick McHugh, a staff lawyer for the National Employment Law Project, which opposed the law. “And that does seem doubly unfair when the temporary help for current jobless workers is almost totally paid for by the federal government.”
But business groups saw the state’s need to change its unemployment law as an opportunity to make the cuts to benefits that they have long sought.
More than half the states together owe the federal government more than $46 billion that they borrowed to pay for their unemployment programs during the downturn. Many states had salted away too little money in their unemployment trust funds during good times -- often because they cut taxes on employers -- and saw their funds depleted by the length and depth of the recession, and the slow pace at which businesses have begun hiring again. Now some other states are thinking about reducing unemployment benefits.
Cooper used still more loaded language, accusing a similar bill in Florida of threatening to "undo a consensus” (so what?) of generous state unemployment benefits, which are in addition to the 99 possible weeks of federal unemployment benefits.
In Florida, where the unemployment rate hovers at 11.5 percent, even higher than Michigan’s current rate of 10.4 percent, lawmakers are zeroing in on a similar bill. The Florida House also approved a bill this month to reduce the number of weeks unemployed workers could receive benefits to 20 weeks, from 26, and make it easier for businesses to deny benefits to applicants. A Senate bill takes a less stringent approach and does not cut the number of weeks workers can receive benefits. (It is unclear how the differences will be resolved.) Doing so would undo a consensus that emerged in the years after World War II that states should pay up to 26 weeks of unemployment benefits. And it would come as the average length of unemployment has risen.