Michigan’s unemployment insurance woes continue to hurt the states economy. Facing the second highest unemployment rate in the country, trailing only Nevada, the state has struggled to maintain its unemployment insurance program, which continually faces insolvency.
Many of its problems are self-inflicted; its failure to address the fraud and mismangement in the system and the programs reliance on outside funds has hurt the program. Michigan’s choice of a short-term fix, in the form of a major federal loan, stands to create future fiscal problems for the state.
In order to pay back the federal loan, the state has had to impose a new tax on all employers. This will hurt employers around the state and discourage them from hiring. The added cost of doing business in-state could drive even more companies out of state. In short, it seems likely to make an already dire unemployment situation worse.
Policymakers in Lansing have to shape up and work to fix Michigan’s problems themselves rather than looking for more federal bailouts.
