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Published in Economic Development

Michigan unemployment claims rise 550% after widespread closures

BY Thursday, March 19, 2020 10:46am

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Michigan unemployment claims have increased 550 percent since the state ordered service industry businesses to largely close down to help stop the spread of the coronavirus.

The Michigan Department of Labor and Economic Opportunity says the increase is since Sunday and is based on the “normal anticipated activity this time of year,” said LEO spokesperson Erica Quealy. The department could not provide additional information about the numbers.

The state’s Unemployment Insurance Agency said earlier this week that about 5,400 claims were filed on Monday, up from 1,300 to 1,600 on a typical Monday — a 238 percent to 315 percent increase.

The spike in jobless claims mirrors national trends, where states including Ohio and Illinois have seen tens of thousands more claims filed over the past week compared to normal activity. 

The U.S. Department of Labor released its latest unemployment claims report on Thursday morning, showing 281,000 new claims last week, an increase of 70,000 from the previous week. However, the latest figures likely haven’t captured the large spike taking place this week.

Michigan’s increase in unemployment claims comes after Gov. Gretchen Whitmer ordered theaters, casinos, restaurants and bars to close on Monday afternoon to avoid further spread of the coronavirus. Businesses are allowed to remain open for take-out or delivery. The same day, Whitmer also signed an executive order that expanded eligibility for unemployment benefits.

Whitmer’s executive order increases from 20 weeks to 26 weeks the time that workers can seek unemployment, and increases the application eligibility period from 14 to 28 days. In-person registration and work requirements are suspended. Some restaurants and bars have opted to lay off workers to ensure they maintain reliable income as the disease’s reach remains uncertain.

Unemployment benefits under the executive order are for workers who have unanticipated family care responsibilities, including people who have to take care of children because of school closures or family members who have become ill. Workers who are sick, quarantined, immuno-compromised and do not have access to paid and medical family leave or are laid off are also eligible, as are first responders who get sick or are quarantined because of exposure to COVID-19.

The state Department of Labor and Economic Opportunity issued guidance on Wednesday to employers on how to avoid layoffs related to COVID-19. 

“We know that many families and businesses are and will experience economic pain as a result of the COVID-19 pandemic,” LEO Director Jeff Donofrio said in a statement. “Through Gov. Whitmer’s executive action and existing state programs, there are resources for employers affected by COVID-19. We are also strongly urging job providers facing work shortages to place their employees on temporary leave as opposed to termination, so that they may remain eligible for potential federal assistance.”

The department encourages employers to use the unemployment insurance agency’s Work Share program, which allows employers to maintain employment levels and business operations during business declines in regular activity rather than laying off workers.

It also urged employers to place employees on temporary leave rather than terminating them due to uncertainties regarding congressional action on whether and how furloughed workers will be able to access paid sick, family and medical leave.

Read 4247 times Last modified on Friday, 20 March 2020 17:03