Senate Bill No. 806 was passed on December 16, 2011 after strong support in Michigan's Republican-led Senate. The purpose of the bill was to stabilize the state's unemployment trust fund, which has recently caused controversy after the state had to borrow $3.2 million from the federal government in order to cover unemployment benefits (Phipps, Report). As the unemployment rate in Michigan remains higher than the national average, much of this debt has accrued as more money is leaving the trust fund than entering; a fact that is still true today. Senate Bill 806 couples with Senate bills 483 and 484, which were passed in 2009 and 2011, respectively, to authorize the state to borrow additional money in order to repay the federal government.. This bill was strongly supported as a bipartisan measure in the Senate as a means to both begin recovering debts to the federal government, as well as to promote Michigan's position as a business-friendly environment. The legislation also seeks to reform the standards of unemployment benefits, a piece of the policy that underwent a great deal of partisan debate. For instance, individuals who have received half of their total unemployment benefits are now required to take virtually any employment position offered to them, even if the job out of their field of experience and/or pays a lower wage, or the individual may risk losing their benefits. Although the bill as a whole has received bipartisan support in order to help get Michigan back on its feet, this particular clause of the policy had many Democrats fired up. In an attempt to get Republican lawmakers to revise the proposals regarding benefits, Democrats used a procedural move to delay the vote and require a formal reading of the entire proposed legislation. Despite their efforts, the bill passed in both the Michigan House and Senate and was ultimately approved by Governor Rick Snyder on December 16, 2011, and went into effect the same day (Associated Press).
Senate Bill No. 806 also endured scrutiny in regards to modified definitions of "voluntary leave" from the workplace. Under this new law, employees who are absent from work for three consecutive days and do not contact their employer can be considered as having voluntarily left the workplace. Additionally, an employee who loses a requirement for their job can also be considered as having voluntarily left employment. If in violation one of these new laws and consequently unemployed, it is unlikely that these individuals would be able to receive unemployment benefits (Associated Press).
Republicans in the House and the Senate cite that these changes were necessary in order to maintain federal emergency unemployment benefits, which could have been denied to states such as Michigan which have high unemployment rates (Phipps, GOP). Part of this position could be attributable to a study conducted by the National Employment Law Project which posits that a failure to charge employers enough to cover unemployment benefits within the state had left Michigan financially unprepared for the Great Recession, and also has made the road to economic recovery much more strenuous (Phipps, Report). Furthermore, proponents of the legislation have suggested that promoting businesses is the best and only way to begin working toward economic prosperity in Michigan. "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), who also introduced this bill in the Senate, said in regards to how this bill will foster a system wherein businesses are better able to promote job creation (Huffington Post).
Michigan's unemployment rate is still well above 9% (DTMB), ranging about a percent higher than the national unemployment rate (Bureau of Labor Statistics). For this reason, among others, Democratic lawmakers in the Michigan House and Senate have indicated that the requirements of this bill are harmful to the unemployed citizens of the state. These changes can be considered especially detrimental when coupled with new legislation that has reduced the length of time one can receive unemployment benefits to twenty weeks (Associated Press). Despite opposition, the bill has passed and only with time will Michiganders be able to determine whether Senate Bill No. 806 truly accomplishes its main priorities, namely, reducing unemployment insurance fraud, promoting a business-friendly environment, and beginning to recover debts owed to the federal government.
Associated Press. "Jobless benefits bill sparks debate in Michigan." MLive.com. Dec. 10, 2011. Web. Feb. 19, 2012.
Bureau of Labor Statistics. "United States Unemployment Rate." Tradingeconomics.com. Feb. 3, 2012. Web. Feb. 19, 2012.
DTMB. "Michigan Unemployment Rate." Michigan Department of Technology, Management, and Budget. n.d. Web. Feb. 19, 2012.
Huffington Post, "Michigan Unemployment Benefits to be Cut Further." Huffingtonpost.com.
Dec.15, 2011. Web. Feb. 19, 2012.
Phipps, Jeannie, "GOP plan to reform unemployment insurance would cut Michigan
Unemployment insurance to 45.5 weeks." MLive.com. Dec. 12, 2011. Web. Feb. 19,
Phipps, Jeannie. "Report critical of Michigan's handling of unemployment insurance says state digging itself into a massive hole," MLive.com. Aug. 28, 2011. Web. Feb. 19, 2012.